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Investing.com - RBC Capital raised its price target on Gilead Sciences (NASDAQ:GILD) to $100.00 from $98.00 on Wednesday, while maintaining a Sector Perform rating on the stock. The biotech giant, currently trading near its 52-week high with a market cap of $144.6 billion, has demonstrated strong financial health according to InvestingPro analysis, with an impressive 78.5% gross profit margin.
The firm’s proprietary analysis suggests Gilead’s new drug Yeztugo may exceed consensus expectations in its early launch, potentially generating $45 million compared to the $35 million consensus estimate. RBC noted that Yeztugo’s initial uptake might partially explain why Gilead’s Descovy is performing slightly below expectations and why competitor Apretude is experiencing declining sales.
Strong Biktarvy prescriptions are expected to drive an overall beat for Gilead’s HIV products, with RBC estimating $3,763 million in sales versus the consensus of $3,615 million. The recent Biktarvy settlement is also viewed as beneficial for the product’s life cycle.
RBC projects modest softness across Gilead’s oncology, HCV, and COVID-19 products, but still anticipates earnings per share of $2.21, above the consensus estimate of $2.14.
Despite forecasting a solid quarter and acknowledging the stock has pulled back from recent highs, RBC maintained its neutral stance, citing longer-term uncertainties including policy concerns and PrEP market expansion challenges.
In other recent news, Gilead Sciences has reached settlement agreements with generic pharmaceutical companies Lupin Ltd., Cipla Ltd., and Laurus Labs Ltd. to resolve patent litigation concerning its HIV treatment, Biktarvy. This settlement ensures that no generic versions of Biktarvy will enter the U.S. market before April 1, 2036, extending its market exclusivity by over two years. Analysts at Bernstein have reiterated an Outperform rating for Gilead, with a price target of $135, following this settlement. Additionally, Needham maintained a Buy rating on Gilead, emphasizing the potential of the company’s inflammation pipeline as a strategic growth area.
Moody’s has affirmed Gilead’s A3 senior unsecured ratings and revised the company’s outlook to positive, highlighting momentum in its product pipeline. This positive outlook is bolstered by the recent approval and launch of Yeztugo, a twice-yearly subcutaneous injectable for HIV prevention. However, RBC analysts have raised concerns that Gilead’s Biktarvy could become a target of President Trump’s drug pricing initiatives, given recent comments about reducing medication costs in the U.S. Despite these concerns, Gilead continues to be recognized for its strong position in the HIV treatment market.
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