Analysts’ recommendations and target price
Wall Street analysts expect a potential upside of 26.34% for Gilead Sciences (GILD) based on the company’s closing price on March 27. Analysts have revised the company’s target price downward twice, from $84.49 in January to $80.54 in February and then to $80.43 in March. The current consensus analyst recommendation for the stock is a “buy.”
To learn more about Gilead Sciences’ growth drivers in fiscal 2019, read What Are the Key Growth Catalysts for Gilead Sciences in 2019?
Of the 29 analysts covering Gilead Sciences, six have given it “strong buys,” ten have given it “buys,” and 13 have given it “holds.” The highest and lowest target price estimates for the company are $95 and $68, respectively.
On March 27, Gilead Sciences closed at $63.66, 0.90% lower than its previous closing price, 5.54% higher than its 52-week low of $60.32, and 20.04% lower than its 52-week high of $79.61. The company’s market cap is $82.66 billion.
Based on its closing price on March 27, Gilead Sciences has reported returns of -1.46% in the last week, -2.48% in the last month, and 5.15% in the last quarter. The company has reported returns of -15.82% in the last half year, -15.73% in the last year, and 1.77% year-to-date.
Challenges Gilead faces
In the fourth quarter, Gilead Sciences reported revenue of $5.79 billion, a YoY (year-over-year) fall of 2.59% but $279.9 million higher than the consensus estimate. The company reported non-generally accepted accounting principles EPS of $1.44, a YoY fall of 19.10% and $0.25 lower than the consensus estimate.
According to Gilead Sciences’ fourth-quarter earnings conference call, it expects authorized generic versions of Epclusa and Harvoni, which it launched in the fourth quarter through Asegua Therapeutics, to enable it to become competitive in the Medicaid HCV (hepatitis C) market in fiscal 2019. The company expects to see the entry of generic versions of Letairis in the second quarter of 2019.
In addition to concerns about declining HCV revenue and the anticipated generic erosion of Letairis, investors are also worried about the $820 million impairment charge borne by the company in relation to the KITE-585 anti-BCMA research program in multiple myeloma indications.
Subsequently, Gilead Sciences’ share price dropped to $67.03 on February 5, 3.39% lower than its previous closing price.