Hims & Hers Health Gets JPMorgan's Blessing at $35 — But the FDA Holds the Real Vote

NEW YORK, April 26 —

JPMorgan initiated coverage of Hims & Hers Health (HIMS) at Overweight with a $35 price target, implying roughly 15% upside from the current $30.56.

What Actually Happened

Two things landed in the same news cycle, and that's not a coincidence. JPMorgan initiated HIMS with an Overweight rating, while Eli Lilly expanded its LillyDirect partnership to deepen Hims & Hers' GLP-1 weight loss offerings. The Lilly deal matters more than the analyst note. A direct commercial relationship with the company that makes tirzepatide gives HIMS a path to selling branded GLP-1 drugs, not just compounded versions operating in a regulatory gray zone. JPMorgan's initiation reads like a vote of confidence in that exact pivot. Wall Street doesn't typically slap Overweight ratings on companies whose core product might get pulled by a regulator.

The Catch

The entire GLP-1 thesis for HIMS rests on a question nobody at JPMorgan or Eli Lilly can answer: what will the FDA do about compounded semaglutide? The agency has been tightening its stance on compounding pharmacies selling knockoff versions of Novo Nordisk's Ozempic and Wegovy. If FDA enforcement shuts down compounded GLP-1s, a meaningful chunk of HIMS revenue disappears overnight. The Lilly partnership is partly a hedge against exactly that outcome, a way to stay in the weight loss business through the front door instead of the side entrance. But the transition isn't free. Branded drugs carry lower margins than compounded ones, and HIMS would go from being the low-cost provider to being a distribution channel for someone else's product. At 22.2x forward earnings, the stock is priced for things going mostly right.

Bottom Line

This is a better setup than HIMS had six months ago. Having both JPMorgan coverage and a deeper Lilly relationship removes two risks: obscurity and supplier dependency. But the stock is still a binary bet dressed up as a growth story. If the FDA cracks down hard on compounding, the Lilly partnership becomes a lifeline rather than a growth lever. If compounding stays legal, the partnership is pure upside. The number to watch is GLP-1 revenue contribution in the next earnings report, because that tells you how exposed the company really is to a single regulatory decision.

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Basis Report does not hold positions in securities discussed. This is not investment advice.