In light of impending and recent earnings reports, brokerage firms Maxim and UBS cut their price targets today on pharmaceutical giant Gilead Sciences, Inc. (NASDA:GILD) and retail giant Wal-Mart Stores, Inc. (NYSE:WMT), respectively. Below are the changes along with current ratings and comments from lead analysts Jason Kolbert and Michael Lasser.
Gilead Sciences, Inc.
After reviewing Gilead’s latest earnings, Maxim analyst Jason Kolbert reiterated a Buy rating on the stock, while reducing the price target to $115 (from $137), to reflect slower growth in revenue. In calculating his price target, the analyst has also factored in Merck’s launch of Zepatier and its impact on Gilead’s market penetration for its HCV products as well as price pressure in Japan.
Kolbert noted, “HCV is still the major revenue driver for Gilead. We see Japan as a strong contributor to growth even with planned price reductions versus U.S. and Europe (2016) sales, which may show flat revenues or even some decline. Management is focused on managing the HCV product lifecycle, and while competition is coming, we believe Harvoni remains a best-in-class product. We expect to see selective strategic acquisitions as Gilead works to diversify beyond the HCV/HIV platform.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Jason Kolbert has a yearly average return of -23% and a 23% success rate. Kolbert has a 9% average return when recommending GILD, and is ranked #3561 out of 3564 analysts.
Out of the 18 analysts polled by TipRanks (in the past 3 months), 15 rate Gilead stock a Buy, while 3 rate the stock a Hold. With a return potential of 32%, the stock’s consensus target price stands at $118.25.
Wal-Mart Stores, Inc.
UBS analyst Michael Lasser reiterated a Neutral rating on shares of Wal-Mart Stores, while slightly reducing the price target to $66 (from $64), as the next key milestone for the company will be its fourth-quarter earnings and fiscal year 2016 results next week on 18th Feb.
Lasser said, “We project a 1% comp for WMT in 4Q (cons. 0.9%), representing 50 bps of sequential deceleration, but 50 bps of growth on a 2-yr stack. Its holiday was likely decent, supported by strength in Hardlines categories such as toys. MasterCard data suggests overall holiday spending was up 7.9% YoY (vs. 5.5% LY) & we think WMT was a beneficiary.”
“Still, there were challenges. Our checks suggest CE sales were underwhelming. Post holidays, inclement weather likely slowed sales. Meanwhile, we believe WMT faced pressure in consumables. Though, we think it saw improvement from its fresh presentation & in stock levels. Food CPI turned deflationary in Dec, driven by weakness in meats & dairy. Plus, WMT has now cycled the easy SNAP compares. These headwinds will likely persist through early FY’17. This drives our $1.46 EPS est, which is in line w. cons. With WMT already guiding for C’16 & the retailer offering some defensive characteristics, we think the stock will get support on an in-line quarter,” the analyst continued.
According to TipRanks.com, analyst Michael Lasser has a yearly average return of 7.4% and a 55% success rate. Lasser is ranked #275 out of 3564 analysts.