Oppenheimer lifts Gilead stock target to $132 on Trodelvy outlook

Tuesday - Oppenheimer analysts have increased their price target on Gilead Sciences (NASDAQ:GILD) stock to $132.00 from $115.00, while maintaining an Outperform rating. Currently trading at $115.99 with a market capitalization of $144.45 billion, Gilead shares are approaching all-time highs, driven by optimistic projections for the cancer drug Trodelvy. According to InvestingPro data, the stock has delivered an impressive 67.1% return over the past year. Analysts at Oppenheimer believe that Trodelvy, which had been overshadowed by competing treatments, is poised for success, especially after the recent clinical trial developments with a rival drug.

Trodelvy has been in the spotlight as the ASCENT-03 trial nears, which could significantly impact Gilead’s sales. The drug, acquired for $21 billion, is gaining traction due to its potential in treating triple-negative breast cancer (TNBC). With a strong gross profit margin of 78.26% and robust cash flows, Gilead appears well-positioned to capitalize on Trodelvy’s potential. For deeper insights into Gilead’s financial health and 17 additional exclusive ProTips, consider exploring InvestingPro. Oppenheimer’s report published today outlines the reasons for their positive stance on Trodelvy’s prospects, particularly in light of Dato-DXd’s recent overall survival miss in HR+ breast cancer.

The frontline ASCENT-03 trial for Trodelvy is a critical factor in Oppenheimer’s analysis. Analysts suggest that the drug’s relatively unstable linker, previously considered a disadvantage, may actually be beneficial. This could give Trodelvy a competitive edge in the market for TNBC treatments.

Oppenheimer’s bullish outlook for Trodelvy is also based on the potential for the drug to add another billion in sales. This would represent a significant boost for Gilead Sciences, whose acquisition of the drug had raised questions about its value until now.

In conclusion, Oppenheimer’s revised price target reflects their confidence in Trodelvy’s future performance. The firm reiterates their Outperform rating for Gilead Sciences, anticipating that the positive results from the upcoming trial could further drive the stock’s momentum. While analyst targets range from $82 to $130, InvestingPro’s Fair Value analysis suggests the stock is currently trading above its intrinsic value, with technical indicators showing overbought conditions.

In other recent news, Gilead Sciences has made significant strides with its financial and strategic initiatives. The company reported a strong fourth-quarter performance, with revenue and earnings exceeding expectations. This success was driven by robust results in its HIV and liver disease segments, as well as the cancer drug Trodelvy. Despite these gains, lower-than-expected outcomes from cell therapy and Veklury products, along with increased operating expenses, tempered the overall results.

Morgan Stanley (NYSE:MS) has maintained an Overweight rating on Gilead, setting a price target of $123. This follows the FDA’s acceptance of Gilead’s New Drug Application for Lenacapavir, a promising HIV prevention drug, which has been granted Priority Review status. Meanwhile, TD Cowen has raised its price target for Gilead to $100, citing the company’s recent earnings and anticipated product launches. RBC Capital Markets also adjusted its outlook, increasing the price target to $90, reflecting Gilead’s potential growth drivers beyond 2025.

These developments highlight Gilead’s ongoing efforts to innovate in HIV treatment and prevention, with a focus on long-acting therapeutic options. Investors and industry observers are closely monitoring the company’s progress, particularly the upcoming launch of Lenacapavir and its impact on Gilead’s financial performance.

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