UPDATE: Gilead Sciences (GILD) PT Raised to $80 at Bernstein, Upgraded to Outperform
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Bernstein analyst Aaron Gal raised the price target on Gilead Sciences (NASDAQ: GILD) to $80.00 and upgrades to Outperform (from Market Perform).
The analyst comments "Gilead has been inexpensive for the past 4-5 years on DCF metrics (>$100 vs. price of ~$65), but that gap has persisted due to a lack of material catalysts/growth drivers. We believe this is now changing. Our analysis suggests that Trodelvy and magrolimab will likely post positive pivotal results in HR+ breast cancer and AML, respectively, in 2H21. The launch of the two agents will allow top-line growth of ~6.5% in '21-24 (ex RDV), pushing growth valuation metrics (PEG, EV/EBITDA growth) to the $75-$85 range. We also expect an improved view on the stability of the HIV franchise with progress of lenacapavir and the recent Merck partnership. If anything emerges from the internal or partnership pipelines, it would be a bonus. Last, we see the company as relatively defensive relative to industry peers. Only 40% of LTM revenue will face IP losses to 2030. Further, Gilead is mid-range in terms of exposure to US government programs (22% of revenue) and its lower valuation may provide partial protection from sector devaluation as the US government acts on pricing."
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