BofA raises Hims and Hers stock price target on FDA peptide review

BofA raised its price target on Hims & Hers Health (HIMS) to $36 from $25 (Neutral), but flagged FDA developments as a headwind to its peptide optionality narrative: the FDA recommendation (not final) lowers the odds that seven peptides reviewed at the July PCAC meetings clear the bar for addition to the 503A Bulk List. With analysts also trimming earnings expectations (6 revisions downward), the update points to a potentially narrower and more contested legal pathway for broad peptide compounding despite July 23–24 PCAC meetings remaining on schedule.

Analysis

This is less about one adverse analyst note and more about a shrinkage of the “optionality multiple” embedded in HIMS. The stock has been pricing a larger, more durable compounding runway; if the FDA path narrows, the market should haircut long-dated TAM assumptions before it shows up in reported revenue, because the highest-margin, highest-multiple narrative is the first thing to re-rate.

Second-order, the pressure is on customer acquisition economics and mix. If peptide traffic becomes less accessible, HIMS likely has to lean harder on branded GLP-1 distribution and adjacent primary-care categories, which is a lower-ambiguity but also lower-upside model; that is constructive for NVO’s channel control and could improve bargaining power for branded suppliers across telehealth. The real loser is not just HIMS’s top line, but the implied margin structure if growth has to be bought with more spend and less scarcity-driven demand.

The contrarian point is that the market may be conflating an uphill advisory process with a final regulatory denial. If HIMS can show branded-weight-loss share offsetting any compounding slowdown, downside could be capped by a lower but still credible growth algorithm. Falsifiers are straightforward: a materially softer FDA/PCAC signal in July, or HIMS proving stable gross margin and accelerated branded mix; otherwise this is a months-long multiple compression story, not a one-day event.

Key Decisions for Investors

• Short HIMS into strength on any squeeze toward the high-$30s/low-$40s over the next 1-3 weeks; thesis is 15-25% downside if July FDA/PCAC language tightens and the market revises away the compounding TAM premium.
• Pair trade: long NVO / short HIMS for 1-3 months. NVO benefits from branded channel tightening and partner concentration, while HIMS carries the higher regulatory beta and valuation risk.
• If using options, prefer HIMS Sep $35/$30 put spread rather than outright shorting; limited premium outlay with a clean catalyst window around the July meetings and subsequent FDA commentary.
• Set a stop/cover trigger on HIMS if management raises full-year gross margin or branded weight-loss mix in the next update; that would indicate the narrative is shifting from compounding optionality to durable operating leverage.
• Watch XBI as a risk signal: if the broader biotech tape ignores the regulatory headline, the move is probably idiosyncratic to HIMS; if XBI weakens too, consider a small sector hedge rather than a pure single-name short.