Gilead Sciences Faces Challenges, But Analysts Remain Optimistic
Based in Foster City, California, Gilead Sciences, Inc. (GILD) stands as a major player in the biopharmaceutical sector, boasting a market cap of $114.2 billion. Specializing in innovative treatments for severe illnesses, Gilead focuses on areas like virology, oncology, and inflammatory diseases.
Over the past year, GILD’s stock performance has lagged behind the overall market. While shares increased by 21.5%, this growth is notably below the 36.4% surge in the broader S&P 500 Index ($SPX). In 2024, GILD’s year-to-date rise of 20.9% is less than the 25.2% increase seen in the SPX.
When compared to the Health Care Select Sector SPDR Fund’s (XLV) 9.3% gain this year, GILD’s performance has been stronger, highlighting its resilience in a competitive landscape.
Concerns about upcoming patent expirations for crucial medications and rising competition in the pharmaceutical field have contributed to Gilead’s recent struggles. However, following its Q3 earnings report on November 6, GILD shares surged by 6.8%. The company exceeded revenue estimates, recording $7.55 billion, while earnings of $2.02 surpassed Wall Street’s projected $1.58. Gilead anticipates full-year earnings between $4.25 to $4.45 per share.
For the ongoing fiscal year ending in December, analysts predict a decrease in earnings per share (EPS) of 44.1%, bringing the estimate to $3.76 on a diluted basis. Historically, Gilead’s earnings surprises have been mixed; the company surpassed expectations three out of the last four quarters but fell short once.
Out of the 27 analysts following Gilead, the overall consensus remains a “Moderate Buy.” This rating reflects 15 “Strong Buy” ratings, one “Moderate Buy,” and 11 “Holds.”
This outlook is somewhat more positive than three months ago, when just 12 analysts issued “Strong Buy” recommendations.
On November 7, Barclays analyst Carter Gould announced an increase in Gilead’s price target from $84 to $95, pointing to a robust Q3 performance fueled by Veklury and Biktarvy.
While GILD is currently trading above the average price target of $87.88, the highest target from analysts, set at $123, indicates a potential upside of 25.6% from current levels.
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On the date of publication, Rashmi Kumari did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
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