Morgan Stanley downgrades Hims&Hers on valuation concerns

Investing.com -- Morgan Stanley downgraded Hims Hers Health Inc (NYSE: HIMS) to "Equal-weight" from "Overweight" as the stock’s recent strong performance leaves limited near-term upside, despite continued business momentum. The brokerage maintained a positive long-term view but sees better entry points ahead.

Morgan Stanley (NYSE: MS) noted that while Hims&Hers remains a high-growth platform with strong execution, valuation has expanded significantly. Additionally, uncertainty around GLP-1 weight-loss treatments could create volatility. The firm expects a solid earnings report on Feb. 24, with likely upward revisions to estimates, but noted management’s conservative approach to guidance.

The bank set a $60 price target, reflecting a 5.2x enterprise value-to-sales (EV/S) multiple, up from 3.5x previously, citing stronger business momentum and peer valuation trends.

“HIMS is an attractive secular growth story, but we think investors will get better entry points to buy in,” analyst at Morgan Stanley said.

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