Bernstein maintains $120 target on Gilead stock post-Trodelvy data

Published 22/04/2025, 13:52
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Tuesday - Bernstein SocGen Group has reiterated an Outperform rating and a $120.00 price target on Gilead Sciences (NASDAQ:GILD) stock. The biotechnology giant, with a market capitalization of $130 billion and annual revenue of $28.7 billion, has demonstrated strong momentum with a 61.7% return over the past year. According to InvestingPro analysis, the company maintains a GOOD financial health score, supported by strong cash flows and moderate debt levels. The reaffirmation comes in light of new positive phase 3 data from the ASCENT-04 study, which showcased the potential of Trodelvy in the first-line treatment of Triple-Negative Breast Cancer (TNBC). Trodelvy is already approved for use in later stages (second-line or later) of TNBC, based on the results of the ASCENT study.

The analyst, Courtney Breen, highlighted the significance of TNBC as a market opportunity, noting that while pembrolizumab has a broader range of indications (neoadjuvant and metastatic), Trodelvy could tap into a total addressable market (TAM) worth $3-4 billion. The smoothest launch path for Trodelvy, according to Breen, would be building on the existing pembrolizumab backbone.

Breen also pointed out that Gilead Sciences is well-positioned to face potential tariffs due to its localized and US-centric manufacturing footprint. The company’s growth prospects are closely tied to the anticipated approval of Lenacapavir for PrEP in June 2025. Despite the reliance on this approval, there have been no reported disruptions to the pre-PDUFA steps and meetings, likely because the FDA review progressed under a fully-staffed agency.

The analyst acknowledged the high concentration of Gilead’s revenues in the US and in HIV treatments. Although this could pose a risk if HIV-specific issues arise, there has been no indication of such risks at present. Breen also mentioned that most US-AID programs that have been "saved" focus on HIV, suggesting a stable outlook for the company in this area. The company’s financial stability is reflected in its attractive 3% dividend yield and consistent dividend growth over the past decade. InvestingPro subscribers can access 10+ additional key insights about Gilead’s financial health and growth prospects.

In summary, Bernstein SocGen Group’s analysis indicates a positive outlook for Gilead Sciences, with Trodelvy’s new data reinforcing the company’s strong position in the market and its potential for future growth. While trading at a high P/E multiple of 273, InvestingPro’s Fair Value analysis suggests the stock is currently fairly valued. Analyst price targets range from $82 to $140, with a comprehensive analysis available in the Pro Research Report, part of the extensive coverage of 1,400+ US stocks on InvestingPro.

In other recent news, Gilead Sciences announced significant advancements in its cancer treatment research. The company’s Phase 3 ASCENT-04/KEYNOTE-D19 study revealed that the combination of Trodelvy and Keytruda significantly improved progression-free survival in patients with PD-L1+ metastatic triple-negative breast cancer. Meanwhile, Cantor Fitzgerald has resumed coverage on Gilead Sciences, assigning an Overweight rating and setting a price target of $125, driven by the development of the HIV prevention drug lenacapavir and the market success of Biktarvy. Citi analysts have also maintained a Buy rating with a $125 target, expressing confidence in the stability of Gilead’s PrEP revenue despite potential federal funding cuts. BMO Capital Markets reiterated an Outperform rating with a $115 target, acknowledging potential challenges from anticipated reductions in HIV prevention funding but remaining optimistic about the company’s future. These developments come amid reports that the Department of Health and Human Services is considering significant cuts to federal funding for domestic HIV prevention efforts, which could impact Gilead Sciences.

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