Hims continues to rise on analyst upgrades following its Novo Nordisk partnership

Shares of telehealth company Hims & Hers climbed Tuesday as analysts upgraded the stock following the Monday announcement of its landmark deal with Wegovy maker Novo Nordisk.

Shares were recently up 12%.

Citi upgraded Hims to “neutral/high risk” from “sell/high risk” in a Monday afternoon note, writing that the deal “significantly de-risks Hims.” Citi analyst Daniel Grosslight wrote:

“Valuation remains tricky for Hims as much hinges on (1) how much compounded GLP-1 revenue/adj. EBITDA remains post-partnership and (2) how much of the hole HIMS can fill with its branded offering.”

Hims also received an upgrade to “neutral” from “underperform” from Bank of America:

“By partnering with Novo Nordisk and transitioning patients to Novo’s branded product, Hims is likely to experience some attrition, but is also likely to gain new members that are looking for a branded drug.”

The deal will see Novo’s Wegovy offered on Hims in its injection and pill forms later this month, priced at the level Novo charges for self-pay. Hims will also offer Ozempic to treat diabetes. Hims won’t advertise compounded GLP-1s, according to Novo Nordisk. A previous deal between the companies last year fell apart in 55 days after Novo accused Hims of “illegal mass compounding and deceptive marketing.”