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Gilead Stock Falls, Coronavirus Drug Fails in Trial

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Apr. 24 2020, Published 9:12 a.m. ET

Today at 6:07 AM ET, Gilead Sciences (NASDAQ:GILD) stock fell 1.4% to $76.70 in the pre-market session. There were reports that experimental drug remdesivir failed in its first randomized clinical trial. The drug is being considered as a COVID-19 treatment. On Thursday, Gilead Sciences stock fell 4.3% and closed at $77.78 with a market cap of $97.9 billion. The stock price has risen 1.6% in the trailing five-day period, while it has risen 23.4% in the trailing 12-month period.

Currently, Gilead Sciences stock is trading 9.5% below its 52-week high of $85.97 and 27.7% above its 52-week low of $60.89. On a year-to-date basis, the stock has risen by 19.7% as of Thursday.

Johnson & Johnson (NYSE:JNJ) and Abbott Laboratories (NYSE:ABT) returned 1.7% and -1.6% on Thursday, respectively. On the same day, the S&P 500 and the Dow Jones Industrial Average returned -0.05% and 0.2%, respectively.

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Coronavirus treatment vaccine

Gilead Sciences is working on a treatment for the COVID-19 pandemic. The stock fell on Thursday following reports that remdesivir didn’t improve patients’ conditions amid COVID-19 treatment.

According to a CNN report, “A screenshot of the study description posted to the World Health Organization’s website was published by STAT on Thursday. The description in the screenshot notes that the study, which involved 237 patients, found Remdesivir use was not associated with a difference in time to clinical improvement and in this study of hospitalized adult patients with severe Covid-19 that was terminated prematurely, Remdesivir was not associated with clinical or virological benefits.”

Analysts’ expectations for Q1

Gilead Sciences will release the results for its March ended quarter on April 30. Wall Street analysts expect the company to post sales of $5.45 billion in the first quarter—a rise of 3.2% YoY compared to $5.28 billion in the first quarter of 2019. Also, analysts expect the company’s adjusted EPS to fall by 9.7% YoY to $1.59 in the first quarter.

Wall Street analysts expect Gilead’s revenues to fall by 0.6% YoY in 2020 to $22.3 billion. The sales will likely fall by 1.2% YoY in 2021 to $22.0 billion. The adjusted earnings could fall by 4.7% YoY in 2020 to $6.32 per share. However, the profits will likely rise by 0.3% YoY to $6.34 per share in 2021.

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Analysts’ target price for Gilead stock

As of Thursday, 30 analysts track Gilead Sciences stock. Among the analysts, 13 recommend a “buy,” 14 recommend a “hold,” and three recommend a “sell.” Wall Street analysts’ mean target price on the stock is $75.48, which implies a 3% loss from the current level of $77.78. The consensus target price for the stock has risen from $74.91 in March—a rise of 0.8%.

Johnson & Johnson and Abbott Laboratories have average broker target prices of $161.89 and $102.13, respectively. These figures imply returns of 4.1% and 8.7%, respectively, over the next 12 months.

Gilead’s stock returns

On Thursday, Gilead stock was trading 1.5% above its 20-day moving average of $76.65. Meanwhile, the stock is trading 5.2% above its 50-day moving average of $73.94 and 11.4% above its 100-day moving average of $69.80. The stock’s 14-day relative strength index score of 52 suggests that the stock isn’t oversold or overbought.

Read Gilead Stock Rose 13% amid Promising COVID-19 Drug and Gilead Sciences’ COVID-19 Drug Shows Promise to learn more.

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