Bank of America Securities analyst Allen Lutz maintained a Sell rating on Hims & Hers Health (HIMS – Research Report) yesterday and set a price target of $22.00.
Allen Lutz has given his Sell rating due to a combination of factors related to recent developments concerning Hims & Hers Health. The primary concern stems from the FDA’s alert regarding the risks of compounded topical finasteride products, which are a significant part of HIMS’s product lineup. The alert highlights potential adverse events and the lack of FDA-approved topical formulations, which could lead to a shift in consumer preference from topical to oral versions of the drug.
This shift could significantly impact HIMS’s revenue, as the men’s hair loss franchise, heavily reliant on topical finasteride, constitutes a substantial portion of their income. The potential need to transition customers to oral alternatives might result in increased customer churn, thereby pressuring the company’s growth rate. Despite HIMS’s strong brand recognition and diverse product offerings, the uncertainty surrounding the FDA alert’s impact on product formulations and growth trends justifies the Sell rating.
HIMS’s price has also changed slightly for the past six months – from $23.590 to $25.350, which is a 7.46% increase.