Mizuho analyst Salim Syed initiates coverage on Gilead Sciences, Inc. (NASDAQ:GILD) with a Buy rating and an $88 price target, which represents just under a 19% increase from where the stock is currently trading.
In fact, Syed asserts, “GILD is our out-of-consensus call among the big 4 biotech … while GILD is no longer a favorite among biotech investors and has lost much of its fan club, we like the stock on valuation.”
Though the analyst recognizes investor base business concerns as “legitimate,” Syed explains that these apprehensions are, “in our view not necessarily being weighed fairly against the revenues the company may be able to generate (even w/o HBV and NASH).”
Moreover, Syed believes, “While we acknowledge concerns around the HCV base business (and HIV base business) and in fact agree on many levels, we think this stock is undervalued in the market.”
Ultimately, “To be clear, we are not saying this is a table-pounding buy (yet) … there are risks to owning this stock and near-term it’s possible the stock continues to trade lower (from current levels) … but we believe over time the company will execute and patient investors would benefit,” Syed contends.
Currently, the analyst projects HCV estimates “generally in-line” with the Street’s numbers for 2020, calling for $11,668 billion. However, the analyst falls around $1 billion under HIV consensus estimates, with Syed calling for $13,761 billion and the Street forecasting $15,191 billion. With regards to HCV revenues, the analyst predicts a gradual waning of about 10% year-over-year, but not more so, as the Epclusa launch should be advantageous to the giant. However, it is worthy of note that Syed remains largely unfazed with expectations for around 8 years of “breathing room” for the giant to discover new ways to grow its revenue base.
TipRanks analytics exhibit GILD as a Buy. Based on 15 analysts polled in the last 3 months, 10 rate a Buy on GILD, while 5 maintain a Hold. The 12-month price target stands at $99.91, marking a 34% upside from where the shares last closed.