Gilead Sciences, Inc. (NASDAQ:GILD) hepatitis C franchise will again be in the spotlight when the pharmaceutical giant reports first-quarter earnings, scheduled for May 2, after the markets close.
Analysis provided by Cowen analyst Phil Nadeau suggests a solid quarter from Gilead. However, the analyst admits that visibility is low, and suspects that after the quarter investors will continue to debate at what price is the uncertainty around the durability of GILD’s HCV franchise fully priced into shares.
Nadeau wrote, “Following particularly disappointing guidance issued in February, we anticipate investor focus will continue to be on GILD’s HCV franchise as investors look for signs that revenue has begun to stabilize. Unfortunately, Q1 trends and GILD’s recent commentary about 2017 patient volumes suggest that the HCV franchise has yet to plateau. Scrip trends in the U.S. are tracking just ahead of our 2.55BE, and Street consensus of $2.4B. Nonetheless, we worry that weakness in either non-retail demand in the U.S., or in ex -U.S. HCV trends could be a headwind to reported revenue.”
“We find it difficult to have much conviction in what will be reported. Gilead’s HIV franchise remains a bright spot as the launch of Gilead’s TAF-based regimens has put GILD’s HIV business on firmer footing. Scrip trends suggest the launch of TAF-based regimens continues to expand the franchise (+5% Q/Q). U.S. scrips are tracking well ahead of our Q1 estimate, though we suspect de-stocking after February price increases could reduce the upside,” the analyst added.
Nadeau rates Gilead Sciences shares a Buy, with a price target of $100, which implies an upside of 50% from today’s closing price of $66.51.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Phil Nadeau has a yearly average return of 4.4% and a 44% success rate. Nadeau has a -8.9% average return when recommending GILD, and is ranked #1137 out of 4556 analysts.
Out of the 26 analysts polled by TipRanks in the past 12 months, 14 rate Gilead stock a Buy, while 12 rate the stock a Hold. With a return potential of 26%, the stock’s consensus target price stands at $84.