Analysts Weigh In on Two Healthcare Giants: Gilead Sciences, Inc. (GILD), Valeant Pharmaceuticals Intl Inc (VRX)

After two consecutive winning days, the major indexes suffered losses on Thursday, with the iShares Nasdaq Biotechnology Index losing 1.14%. Among the equities in focus today are pharmaceutical giant Gilead Sciences, Inc. (NASDAQ:GILD) and controversial drug giant Valeant Pharmaceuticals International Inc (NYSE:VRX). Let’s take a look and see what the analysts have to say about GILD and VRX.

Gilead Sciences, Inc.

Piper Jaffray analyst Joshua Schimmer reiterated an Overweight rating on shares of Gilead Sciences, with a price target of $134, after the company announced a deal with Galapagos for its JAK inhibitor for inflammatory disorders, including rheumatoid arthritis and Crohn’s.

From the perspective of neutrality, Schimmer wrote, “ABBV recently returned rights for this compound to pursue its own JAK inhibitor. GILD has no meaningful presence in inflammatory diseases and is paying $300M upfront plus a $435M equity investment. GILD’s efforts to extend beyond HIV/HCV in the past have proved disappointing, and we struggle to see how this JAK inhibitor can make a difference. While we acknowledge that the company’s business development efforts have so far been underwhelming, we remain OW rated given the low multiple and our belief that a potentially transformative acquisition could trigger multiple expansion and share appreciation.”

According to, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Joshua Schimmer has a yearly average return of -1.9% and a 44.9% success rate. Schimmer has a 10.2% average return when recommending GILD, and is ranked #3111 out of 3645 analysts.

Out of the 11 analysts polled by TipRanks in the last 3 months, 9 rate Gilead Sciences stock a Buy, while 2 rate the stock a Hold. With a return potential of nearly 26%, the stock’s consensus target price stands at $130.

Valeant Pharmaceuticals International Inc

Nomura Holdings analyst Shibani Malhotra reiterated a Buy rating on shares of Valeant Pharma, with a price target of $175, after coming away from the company’s investor day with more confidence in the company’s underlying fundamentals.

Malhotra stated, “Valeant guided to 2016 EBITDA of $6.9-7bn, slightly above consensus estimates. Revenue guidance of $12.5-12.7bn was ahead of our and consensus estimates of just under $12.5bn and we believe management laid out a credible plan for achieving this as the core ophthalmology, consumer, gastroenterology and Emerging Markets businesses continue to generate strong organic growth, while Valeant’s agreement with Walgreen’s is expected to reaccelerate dermatology growth in 2H16.”

Furthermore, “We believe the Walgreen’s deal bolsters management’s credibility, and should assuage investor fears regarding the impact of the termination of the Philidor relationship. We believe this will enable investors to refocus on Valeant’s underlying fundamentals, and remain buyers as we expect improving fundamentals throughout 2016 to drive VRX shares higher.”

According to, analyst Shibani Malhotra has a yearly average return of 24.1% and a 81.6% success rate. Malhotra has a 6.5% average return when recommending VRX, and is ranked #124 out of 3645 analysts.

Out of the 22 analysts polled by TipRanks, 15 rate Valeant stock a Buy, 6 rate the stock a Hold and 1 recommends a Sell. With a return potential of 46.5%, the stock’s consensus target price stands at $164.81.



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