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Gilead Sciences’ COVID-19 Drug Shows Promise

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Today at 7:55 AM ET, Gilead Sciences (NASDAQ:GILD) stock rose by 3.9% to $75.99 in the pre-market session. The company announced that its remdesivir drug has shown promising early results as a COVID-19 treatment. On April 10, Gilead Sciences stock fell by 2.0% and closed at $73.51. Based on the last closing price, the company has a market cap of $92.6 billion. The stock price has fallen by 4.5% in the trailing five-day period, while it has risen by 11.2% in the trailing 12-month period.

Currently, Gilead Sciences stock is trading 14.5% below its 52-week high of $85.97 on March 19, 2020. The stock is also trading 20.7% above its 52-week low of $60.89 on October 3, 2019. On a year-to-date basis, the stock has risen by 13.1% as of April 10.

Coronavirus vaccine

Gilead Sciences is one of the healthcare companies that’s working on a treatment for the coronavirus pandemic. Gilead Sciences stock rose after reports that the company identified an experimental drug for patients with serious COVID-19 infections.

According to a report from TheFly, “Gilead Sciences announced Friday results from a cohort analysis of 53 patients hospitalized with severe complications of COVID-19 who were treated with the investigational antiviral remdesivir on an individual compassionate use basis. The majority of patients in this international cohort demonstrated clinical improvement and no new safety signals were identified with remdesivir treatment.” The report also said, “Compassionate use data have limitations due to the small size of the cohort, the relatively short duration of follow-up, potential missing data due to the nature of the program and lack of a randomized control group.”

Gilead Sciences’ growth projections

Gilead Sciences reported sales of $22.45 billion in 2019—a rise of 1.5% YoY (year-over-year) from sales of $22.13 billion in 2018. The company reported an adjusted EPS of $6.63 in 2019 compared to $6.67 in 2018. Wall Street analysts expected the company to post revenues of $22.27 billion and adjusted earnings of $7.02 in 2019.

Wall Street analysts expect Gilead Sciences to post sales of $5.43 billion in the first quarter. The figure would mark a rise of 2.8% YoY compared to $5.28 billion in the first quarter of 2019. Also, analysts expect the company to post an adjusted EPS of $1.56 in the first quarter compared to $1.76 in the same period last year. Currently, analysts expect -0.6% and -1.3% growth in the company’s 2020 and 2021 sales, respectively. Meanwhile, they expect an adjusted EPS of $6.35 and $6.40 in 2020 and 2021, respectively.

Analysts’ recommendations for Gilead Sciences

Among the 30 analysts covering Gilead Sciences stock, 15 recommend a “buy”—up from 12 the previous month. Meanwhile, 12 analysts recommend a “hold”—down from 13 the previous month. Three analysts recommend a “sell”—unchanged from the previous month.

Analysts have an average target price of $75.24 on Gilead Sciences. The target price implies a return of 2.4% based on the closing price of $73.51 on April 10. The consensus target price for the stock has risen from $74.04 in March—a rise of 1.6%.

Gilead Sciences’ stock returns

On April 10, Gilead Sciences stock was trading 1.2% below its 20-day moving average of $74.38. Meanwhile, the stock is trading 2.4% above its 50-day moving average of $71.81 and 7.1% above its 100-day moving average of $68.65. The stock’s 14-day relative strength index score of 49 indicates that it isn’t oversold or overbought.

Gilead Sciences has an upper Bollinger Band level of $79.96. The company’s middle Bollinger Band level is $74.38, while its lower Bollinger Band level is $68.81. On April 10, the stock closed near its middle Bollinger Band level, which also suggests that it isn’t oversold or overbought.

Currently, Gilead Sciences stock is trading at 11.58x its 2020 estimated EPS of $6.35. Meanwhile, the stock is trading at 11.49x its 2021 estimated EPS of $6.40. Wall Street analysts expect Gilead Sciences’ earnings to rise at a CAGR of 0.8% over the next five years.

Abbott Laboratories (NYSE:ABT), Johnson & Johnson (NYSE:JNJ), and AbbVie (NYSE:ABBV) stocks returned 1.3%, -1.4%, and 1.5% on April 10. On the same day, the S&P 500 and the Dow Jones Industrial Average rose by 1.5% and 1.2%, respectively. Read COVID-19: Have US Stock Markets Bottomed Out? to learn more.

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