Gilead Sciences (GILD) Stock: Analyst Believes New CEO Could Be a Game-Changer
Congrats! Gilead Sciences (GILD) has just appointed Daniel O’Day as the Chief Executive Officer of the pharmaceutical giant. Cantor analyst Alethia Young feels positive about the change, reiterating an Overweight rating and $88 price target for the stock, which implies a 30% upside from current levels. (To watch Young’s track record, click here)
Young praises O’Day for his extensive background in pharma and notes his experience includes being unit head for the arthritis and respiratory departments. The analyst also suggests she believes O’Day’s key legacy from Roche was his ability to weave products with companion diagnostics. Additionally, he was the senior leadership in both pharma and diagnostics.
“We are encouraged by the appointment of O’Day, as we think that the company is appointing a leader that will focus on product pipeline diversification and commercial growth,” the analyst explains.
Young also believes O’Day will be more aggressive as CEO when it comes to M&A strategy with GILD’s significant amount of cash, nodding to a list of a dozen and a half deals O’Day was directly responsible for.
“We also note that Gilead has close to $30B in cash available (relative to its $88B in market cap). From looking at the list, our observation is that many deals were done (especially ones under $1B) and the InterMune deal looks like the biggest one at $8B. Esbriet (the InterMune IPF) drug has been on market for four years and currently sells about $750M based on 9 months YTD sales reported by Roche,” Young said.
It is yet to be seen how changes in leadership will affect the company. In the interim, TipRanks is reviewing all 14 analysts who have an eye on GILD stock and have been for the past three months; 10 are bullish and 4 sidelined. The consensus price target of $87.38 shows an upside of 31% from where the stock currently stands. (See GILD’s price targets and analyst ratings on TipRanks)