Piper Jaffray Reiterates Overweight Rating on Gilead Sciences (GILD)
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Piper Jaffray reiterated an Overweight rating and $108.00 price target on Gilead Sciences (NASDAQ: GILD). GILD has been winning favorable formulary coverage and enabling access to earlier stage fibrosis patients at the expense of a lower cost per patient resulting from shorter duration of therapy and higher discounts. The company is also having some strong success converting its HIV business to TAF based therapies.
Analyst Joshua Schimmer commented, "With a 7x forward multiple, little has to go right with GILD to drive shares higher, especially in a market environment where other sectors feature ~5% earnings growth names trading with P/E multiples >20x. We believe that ongoing conversion of the HIV business to TAF based therapies, introduction of an FDC comprising of a 1/d unboosted integrase inhibitor with Descovy (TAF/Emtriva) along with stabilization of the HCV franchise will be enough to convince investors that a flattish earnings outlook can drive shares up to a modest 10x P/E multiple (~40% upside). Consensus estimates have essentially no contribution from bictegravir/Descovy, which can extend GILD's dominance from the 2-NRTI segment of 3- drug FDCs to the remaining 1/3 of the regimen. Reiterate OW, GILD is our top large cap pick as a deep value name."
Shares of Gilead Sciences closed at $79.65 yesterday.
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