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Investing.com - Bernstein has reiterated an Outperform rating and $120.00 price target on Gilead Sciences (NASDAQ:GILD), currently trading at $111.06 with a market capitalization of $138 billion, highlighting the growth potential of its recently FDA-approved HIV prevention drug Yeztugo. According to InvestingPro data, the company maintains a "GREAT" financial health score, supported by strong cash flows and moderate debt levels.
The firm views Yeztugo (lenacapavir) as a breakthrough treatment that could drive significant growth for Gilead, particularly following its recent FDA approval for HIV prevention (PrEP) as a monotherapy, in addition to its existing approval for multi-drug resistant HIV treatment.
Bernstein projects $6.6 billion in Yeztugo PrEP revenue by 2030, which it notes is 61% above consensus estimates, despite acknowledging the possibility of a slow initial launch due to paradigm shifts and access expansion requirements. With a P/E ratio of 23.31 and analyst targets ranging from $93 to $140, InvestingPro analysis suggests the stock is currently trading near its Fair Value. Subscribers can access 10+ additional ProTips and comprehensive valuation metrics in the Pro Research Report.
Key to an accelerated launch will be insurance formulary adoption and addressing logistical gaps, with Gilead guiding to 75% coverage within six months and 90% coverage within one year post-launch, according to the research note.
The firm expects Yeztugo’s quarterly trajectory to outperform GlaxoSmithKline (NYSE:GSK)’s competing HIV prevention drug Apretude, and has increased its FY25 EPS estimate for Gilead to $8.05 following minor model adjustments to margins and share count.
In other recent news, Gilead Sciences has announced several significant developments. The company received FDA approval for Yeztugo, its injectable HIV-1 capsid inhibitor for pre-exposure prophylaxis, marking it as the first and only twice-yearly option available in the United States for HIV prevention. This approval is seen as a major growth opportunity for Gilead’s PrEP business, with BMO Capital reiterating an Outperform rating and a price target of $120. Additionally, Gilead has entered into an exclusive option and license agreement with Kymera Therapeutics to develop a novel molecular glue degrader targeting cyclin-dependent kinase 2 (CDK2) for cancer treatment. Under this agreement, Kymera could receive up to $750 million in payments. RBC Capital has raised its price target for Gilead to $95 from $92, citing market opportunities for lenacapavir, although they maintain a Sector Perform rating due to potential challenges in market expansion. The collaboration with Kymera highlights Gilead’s focus on innovative cancer therapies, while the FDA’s approval of Yeztugo underscores its leadership in HIV prevention.
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