Citigroup upgraded the rating of Hims & Hers Health from 'Sell' to 'Neutral' and significantly raised the target price from $13.25 to $24.
According to Zhitong Finance, Citigroup upgraded Hims & Hers Health (HIMS.US) from "Sell" to "Neutral" and significantly raised its target price from $13.25 to $24—this represents an approximate 8% upside potential based on the closing price on March 9. This adjustment is primarily due to a key agreement recently reached between the company and Novo-Nordisk A/S (NVO.US): by acting as an authorized distributor for Novo-Nordisk's GLP-1 drugs used in weight management and type 2 diabetes treatment, Hims & Hers Health has substantially mitigated several business risks that had previously concerned the market, including issues such as product pipeline limitations, competitive pressures, and regulatory uncertainties.
In its latest research report, Citi highly praised this collaboration, describing it as a pivotal turning point in Hims & Hers' development. Citi analysts noted that by introducing officially licensed medications, Hims & Hers successfully resolved long-standing compliance shadows and legal risks that had plagued its business model. The transition from selling "compounded generic versions" to becoming an "official partner" not only greatly enhanced the sustainability of its operations but also allowed the company to penetrate more deeply into the lucrative weight-loss medical market.
This positive news triggered a sharp rebound in the secondary market, with Hims & Hers' share price surging over 35% during the trading session following the announcement. It closed up 40.79% on Monday at $22.16 per share. Market investors widely believe that Novo-Nordisk A/S chose to leverage Hims' robust telemedicine channels and brand influence, which will accelerate the adoption rate of its weight-loss drug products among consumers. Meanwhile, Hims & Hers solidified its leadership position in the digital healthcare sector through this partnership.
Although specific pricing details for the distribution of Wegovy and Ozempic via Hims & Hers Health have not been disclosed, analyst Daniel Grosslight projected that the average monthly cost of these two drugs would be approximately $100 higher than the cash self-pay price on Novo-Nordisk’s official NovoCare platform. This premium is mainly attributed to the value-added service bundle provided by Hims & Hers—customers purchasing the medications can access professional medical team support, personalized nutrition plans, and exercise guidance, creating a bundled offering of "medication + services."
At the same time, Grosslight cautioned about potential risk clauses within the cooperation agreement: under the terms of the deal, Hims & Hers must cease large-scale compounding of semaglutide (the core active ingredient in Wegovy and Ozempic). This restriction could significantly impact its revenue structure, potentially leading to a substantial decline in the company’s total revenues and adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization).
