Bank of America lowered its 2026 price target for Hims & Hers (NYSE:HIMS) to $21 from $23, citing peer multiple compression and near-term earnings pressures.

Shares of Hims & Hers traded hands at about $20 on Wednesday, down almost 39% so far this year.

The firm reiterated a ‘Neutral’ rating, noting significant uncertainty and potential downside for near-term EBITDA.

The analysts projected 2026 EBITDA could come in roughly 20% below Street consensus and estimated GLP-1 EBITDA contributions might fall by as much as 50% year-over-year.

They highlighted that the company’s shift to branded GLP-1 offerings and international expansion is expected to weigh on margins.

“Ultimately, the shift to branded may create a more sustainable platform, but with a margin headwind near-term as recent investments need to be repurposed or wound down,” the analysts wrote.

Despite near-term margin concerns, Bank of America cited potential growth in the branded segment. The analysts wrote that the $149-per-month branded GLP-1 plan has the potential to generate EBITDA per subscriber similar to compounded offerings over time, but emphasized that success will depend on how many customers switch from the low-cost model.

They estimated Hims & Hers could convert 40% to 50% of existing subscribers to branded plans and retain 5-10% on compounded offerings, generating roughly $60 million to $90 million in quarterly GLP-1 revenue, along with additional growth from cash-pay subscribers.

International expansion was also highlighted as a growth avenue. Hims & Hers aims to grow its international business to over $1 billion in the next three years, with a mid-teens organic CAGR.

Bank of America’s checks on the Eucalyptus platform indicated that about 90% of revenue is expected from branded GLP-1 distribution, operating at roughly 40% gross margins.

The analysts added that “a half-year of Eucalyptus contributions could be a 1 to 2 percentage point EBITDA margin headwind for HIMS assuming Eucalyptus is operating at a low single-digit EBITDA margin loss,” but noted potential for margin improvement over time.