Hims & Hers (HIMS 6.76%) stock was a heartening comeback story on Wednesday, following something of a rout earlier in the week. Several analysts raised their price targets on the specialty healthcare company on that slump, which helped Hims & Hers recover by more than 5% in mid-week action. That was more than good enough to top the S&P 500 index's essentially flat performance.
Post-slump pundit boosts
The source of investor bearishness in previous days was Hims & Hers' announcement on Monday that it might halt sales of a highly popular product -- compound versions of semaglutide, the white-hot molecule used in Novo Nordisk's Wegovy. Hims & Hers had been allowed to sell semaglutide due to a shortage in the market. However, the U.S. Food and Drug Administration (FDA) has declared the shortage over.
Investors can be rather unforgiving when a company even hints at abandoning a hot product or service. So not surprisingly, they traded aggressively out of Hims & Hers when disseminating the news.
In reaction to this, several analysts tracking the stock effectively judged this to be an overreaction. After market close on Tuesday, TD Cowen's Jonna Kim just as aggressively raised her price target on the stock, to $44 per share from $28. She maintained her buy recommendation because, according to reports, she still feels the company has fine potential even without semaglutide.
Joining the club
Joining Kim in the Hims & Hers price target boost party were Piper Sandler's Korinne Wolfmeyer and Truist's Jailendra Singh, both of whom made substantial raises. The two remained cautious about the company's prospects, however, as they held fast to their equivalents of hold recommendations.
The optimism is understandable, as Hims & Hers is an innovative healthcare company that probably doesn't need semaglutide to grow and succeed. Still, as a wildly popular product its loss is going to be felt, and not comfortably -- particularly since the company recently invested quite a bit of capital to publicize this business.
