Chip stocks fall with Nvidia after data center rev disappointment
Tuesday, Cantor Fitzgerald resumed coverage on Gilead Sciences (NASDAQ:GILD) shares, assigning an Overweight rating and setting a price target of $125. The stock has demonstrated remarkable strength, delivering a 61.7% return over the past year according to InvestingPro data. The firm’s analysts highlighted the positive performance of Gilead’s stock in the second half of 2024, buoyed by advancements in the development of lenacapavir, an HIV prevention drug. They anticipate this upward trajectory to continue, propelled by the successful launch of lenacapavir and further market penetration by Biktarvy, which they expect to drive the HIV franchise’s sales growth through 2025-2030.
Cantor Fitzgerald’s analysts believe that Gilead Sciences is poised for a multi-year period of margin expansion, building on its already impressive 78.3% gross profit margin. They also foresee next-generation oral HIV treatments, expected to emerge in 2025, enhancing the company’s prospects post-Biktarvy into the mid-2030s. InvestingPro analysis shows the company maintains a strong financial health score, with 12 additional key insights available to subscribers. Furthermore, the analysts project that the development of long-acting oral and injectable treatments, with data anticipated beyond 2027, will solidify Gilead’s long-term franchise viability, setting it apart from its peers in the biopharmaceutical sector.
While acknowledging the challenges faced by the sector, including Medicaid cuts and regulatory uncertainties, Cantor Fitzgerald’s analysts expect the approval process for lenacapavir to be straightforward. They also note that Gilead’s focus on the U.S. market, which spans its sales, manufacturing, and tax base, mitigates tariff-related risks. The company’s strong financial position is evidenced by its decade-long history of dividend increases and robust free cash flow yield, as highlighted in InvestingPro’s comprehensive research report, available to subscribers.
The analysts’ outlook is grounded in the strength of Gilead’s HIV treatment pipeline and the company’s strategic positioning. They underscore the potential for Gilead’s HIV franchise to sustain growth and competitiveness well into the future, backed by a robust lineup of treatments and a favorable market environment.
In other recent news, Gilead Sciences has announced significant findings from its Phase 3 ASCENT-04/KEYNOTE-D19 study, which showed a marked improvement in progression-free survival for patients with metastatic triple-negative breast cancer treated with a combination of Trodelvy and Keytruda. This development could redefine treatment options for this challenging cancer type, though overall survival data is still being monitored. In the realm of HIV prevention, Citi analysts have maintained a Buy rating for Gilead’s stock with a $125 price target, despite potential cuts in federal funding for HIV prevention. BMO Capital Markets also reiterated an Outperform rating with a $115 target, suggesting that Gilead’s PrEP business might face only modest impacts from funding changes. Meanwhile, Gilead is preparing for the launch of lenacapavir, a next-generation PrEP drug, anticipated to achieve significant coverage quickly. Additionally, Gilead Sciences has announced the departure of its Senior Vice President, Sandra Patterson, with Diane E. Wilfong stepping in as interim Corporate Controller and Chief Accounting Officer. This leadership change is part of Gilead’s ongoing executive adjustments.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.