Biotech’s Sell-Side Roundup: Cowen’s Take on Gilead Sciences, Inc. (GILD) and Celgene Corporation (CELG)

Gilead Sciences, Inc.

Cowen analyst Phil Nadeau is out with a research note on shares of Gilead Sciences, Inc. (NASDAQ:GILD), after the biotech giant reported second-quarter financial results yesterday, posting revenues of $7.14 billion, above consensus $6.33 billion estimates. Non-GAAP EPS $2.56 was above consensus $2.14 estimates. In addition, Gilead raised product sales guidance to $24.0-25.5 billion (from $22.5-24.5 billion).

Nadeau wrote, “We are encouraged by GILD’s Q2 performance, though we suspect it is too early to confidently conclude the HCV business has stabilized. Nonetheless, our DCF analysis continues to suggest that GILD is undervalued.”

“We think that bictegravir will help GILD regain share from ViiV’s dolutegravir-based regimens beginning in 2018. Based on current trends, our 2017 HIV franchise estimate has increased from $13.2B to $13.3B (+3% Y/Y),” the analyst added.

Nadeau reiterates an Outperform rating on Gilead shares, with a price target of $90, which implies an upside of 20% from current levels. (To watch Nadeau’s track record, click here)

Out of the 14 analysts polled in the past 3 months, 11 rate Gilead stock a Buy, while 3 rate the stock a Hold. With a return potential of 9%, the stock’s consensus target price stands at $82.18.

Celgene Corporation

Celgene Corporation (NASDAQ:CELG) shares moved slightly lower today, after the drug maker released second-quarter results. Celgene posted non-GAAP EPS of $1.82, beating consensus forecasts of $1.77. Reported net income for the quarter was 28% higher Y/Y and came in at $1.47 billion.

In the wake of the earnings report, Cowen’s Eric Schmidt reiterates an Outperform rating on shares of Celgene, with a $150 price target, which represents a potential upside of 11% from where the stock is currently trading.

Schmidt commented, “Q2 sales were in-line to modestly better than expectations. Most importantly, Otezla rebounded on the heels of new managed care contracting following a weak Q1. Revlimid posted sales just above consensus estimates. The solid quarterly performance enabled Celgene to exceed non-GAAP EPS estimates and raise non-GAAP EPS targets.”

“A solid growth outlook and a reasonable valuation make CELG a top large-cap pick,” the analyst concluded.

According to, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Eric Schmidt has a yearly average return of 35% and a 67% success rate. Schmidt has a 14% average return when recommending CELG, and is ranked #22 out of 4160 analysts.


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