JPMorgan initiates coverage, Lilly partnership clarified, BofA raises target

BofA target upgrade

Commentary

BofA's model is being forced to chase the price, yet the rating has not moved. That suggests conviction has yet to form.

Rating

Neutral

Target sequence

$21 to $25 to $30 to $32

Timeframe

Four straight raises in 2 weeks

JPMorgan initiation

Cory Carpenter

Key arguments

• The Novo Nordisk partnership is the turning point: it resolves the legal uncertainty and cements HIMS's position as a one-stop platform for branded drugs, generics and compounded drugs
• GLP-1 makes up more than 35% of revenue. The fading of the shortage windfall adds uncertainty, but the base business is solid.
• The 2030 revenue target is at least $6.5 billion, and international business grew 825% year on year (driven by the Eucalyptus acquisition)
• Revenue growth is expected to accelerate again in the second half

Rating

Overweight (Buy)

Significance

The first large investment bank to issue a Buy rating. Before this, the consensus target price of 17 analysts was about $31.71, and most of them rated the stock Neutral or Hold.

Target price

$35

Upside

About 15% above the current price

Lilly partnership clarification

Official statement

Prescribing through LillyDirect does not imply a partnership with, or endorsement by, Eli Lilly. Any licensed doctor can write prescriptions to LillyDirect.

Significance

HIMS is now the only telehealth platform integrating both Novo (Wegovy) and Lilly (Zepbound/Foundayo), so users do not have to switch platforms

Summary

HIMS has built LillyDirect into its prescribing workflow. This is not an exclusive partnership.

Price action

Change

+8.56%

Options activity

Unusually heavy options activity

Price

$30.56