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Gilead Stock Rose 13% amid Promising COVID-19 Drug

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Today at 8:24 AM ET, Gilead Sciences (NASDAQ:GILD) stock rose 12.7% to $86.25 in the pre-market session. The stock rose after reports that COVID-19 patients are responding to remdesivir—the company’s experimental drug. On Thursday, Gilead Sciences stock rose 2.6% and closed at $76.54 with a market cap of $96.4 billion. The stock price has risen 2.1% in the trailing five-day period, while it has risen 18.6% in the trailing 12-month period.

Currently, Gilead Sciences stock is trading 11.0% below its 52-week high of $85.97 on March 19, 2020. The stock is also trading 25.7% above its 52-week low of $60.89 on October 3, 2019. On a year-to-date basis, the stock has risen by 17.8% as of Thursday.

Johnson & Johnson (NYSE:JNJ), Abbott Laboratories (NYSE:ABT), and AbbVie (NYSE:ABBV) stocks returned 1.4%, 5.6%, and 0.1% on Thursday. On the same day, the S&P 500 and the Dow Jones Industrial Average rose 0.6% and 0.1%, respectively.

COVID-19 vaccine

Gilead Sciences is working on a treatment for the coronavirus outbreak. The stock rose after STAT News reported that coronavirus patients are responding to Gilead’s remdesivir drug. However, Gilead didn’t respond to the reports.

According to a MarketWatch report, “There are no proven treatments or vaccines for the novel coronavirus which has sickened more than two million people world-wide and killed nearly 150,000 people, but remdesivir is considered a front-runner in the race to develop a treatment for COVID-19 infections that works.” The report also said, “Though the findings reported by Stat are promising, they are not based on full clinical trial data from the company.”

Analysts’ expectations for Q1

Gilead Sciences will likely report its first-quarter earnings results on April 30. Analysts expect the company to report revenue of $5.44 billion in the first quarter of 2020—a rise of 3.0% from $5.28 billion in the same quarter the previous year. Analysts also expect that the company will report an adjusted EPS of $1.56 during the quarter compared to $1.76 in the same quarter in 2019.

Currently, analysts expect -0.6% and -1.2% growth in the company’s 2020 and 2021 revenues, respectively. Analysts also expect an adjusted EPS of $6.31 and $6.36 in 2020 and 2021, respectively.

Analysts’ recommendations for Gilead Sciences stock

As of Thursday, 30 analysts cover Gilead Sciences stock. Among the analysts, 15 recommend a “buy,” 12 recommend a “hold,” and three recommend a “sell.” Analysts have an average target price of $75.32 on Gilead Sciences. The target price implies a return of -1.6% based on the closing price of $76.54 on Thursday. The consensus target price for the stock has risen from $74.17 in March—a rise of 1.6%.

Johnson & Johnson, Abbott Laboratories, and AbbVie have average broker target prices of $160.41, $98.40, and $92.62, respectively. These figures imply returns of 7.2%, 2.5%, and 13.1%, respectively, over the next 12 months.

Peer comparison

In the first quarter, Johnson & Johnson reported revenue of $20.7 billion—3.3% growth from $20.0 billion in the first quarter of 2019. The company beat analysts’ consensus estimate of $19.5 billion. Johnson & Johnson’s adjusted EPS of $2.30 was above analysts’ estimates of $2.00 per share in the first quarter. However, the company reported an adjusted EPS of $2.10 in the first quarter of 2019. Read Johnson & Johnson Beats Q1 Estimates, Raises Dividend to learn more.

In the first quarter, Abbott Laboratories reported revenue of $7.7 billion—2.5% growth from $7.5 billion in the first quarter of 2019. The company beat Wall Street analysts’ consensus estimate of $7.3 billion. Abbott’s adjusted EPS of $0.65 was above analysts’ estimates of $0.58 per share in the first quarter. However, the company reported an adjusted EPS of $0.63 in the first quarter of 2019. Read Abbott Laboratories Posted Its Q1 Earnings, Stock Rose 4% to learn more.

Gilead Sciences’ stock returns

On Thursday, Gilead Sciences stock was trading 2.2% above its 20-day moving average of $74.91. Meanwhile, the stock is trading 5.3% above its 50-day moving average of $72.67 and 10.8% above its 100-day moving average of $69.10. The stock’s 14-day relative strength index score of 54 indicates that the stock isn’t overbought or oversold.

Gilead Sciences has an upper Bollinger Band level of $79.34. The company’s middle Bollinger Band level is $74.91, while its lower Bollinger Band level is $70.49. On Thursday, the stock closed near its middle Bollinger Band level, which indicates that the stock isn’t overbought or oversold.

Currently, Gilead Sciences stock is trading at 12.13x its fiscal 2020 estimated EPS of $6.31. Meanwhile, the stock is trading at 12.04x its fiscal 2021 estimated EPS of $6.36. Analysts expect Gilead Sciences’ earnings to rise at a CAGR of 0.79% over the next five years.

Read Gilead Sciences’ COVID-19 Drug Shows Promise to learn more.

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