Gilead Sciences

Gilead Sciences Upgrades 2020 Earnings Forecast on Strong Demand for Remdesivir

The U.S. drugmaker Gilead Sciences revised its full-year 2020 profit guidance as the second wave of coronavirus infections boosted the demand of Remdesivir, an antiviral agent that scientists initially designed to treat Ebola, also, beneficial for COVID-19 treatment.

The California-based biopharmaceutical company said it has upgraded their total product sales guidance range to the range $24.30 billion to $24.35 billion, reflecting increased remdesivir sales as hospitalization and treatment rates were higher than expected given the most recent COVID-19 surge.

The commercial-stage biotechnology company forecasts adjusted earnings to $6.98-$7.08 per share, up from a previous forecast of $6.25- $6.60 per share.

At the time of writing, Gilead Sciences shares traded 0.66% lower at $62.62 on Monday; the stock fell 10% in 2020.

Analyst Comments

Gilead Sciences (GILD) pre-announced a positive Q4 driven mostly by Remdesivir (RemD) as the value remains high. Bottom line is based on our conversations w/ mgmt, the co is confident about growth in 2021 and beyond. ’21 Guidance should be OK (or conservative) and separating out RemD will also show growth of underlying biz. GILD should generally move back up in 2021 on improving sentiment and also on new data this year,” said Michael J. Yee, equity analyst at Jefferies.

“For 2021, we could see GILD guide EPS $6.00-7.00 vs cons $6.57, with RemD and expenses as key swing factors – with the key issue that RemD is a wide range. We raised our H1:21 RemD estimates by $1 billion, which brings total 2021 RemD to $2.5 billion, given Q4:20 sales were strong and COVID-19 vaccines are just being rolled out. We raised our EPS from $5.74 to $6.15 but acknowledge RemD could be a wide range. Overall, the key message is 2021 should be fine and defined as a success if numbers are in-line but NEW clinical datasets read out positive from IMMU, RCUS, and FTSV (filing to FDA already in 2021 on MDS with CD47 drug),” J. Yee added.

Gilead Sciences Stock Price Forecast

Twenty-three analysts who offered stock ratings for Gilead Sciences in the last three months forecast the average price in 12 months at $73.94 with a high forecast of $100.00 and a low forecast of $61.00.

The average price target represents a 17.44% increase from the last price of $62.96. From those 23 analysts, ten rated “Buy, twelve rated “Hold” and one rated “Sell”, according to Tipranks.

Morgan Stanley gave a base target price of $67 with a high of $88 under a bull scenario and $35 under the worst-case scenario. The firm currently has an “Equal-weight” rating on the biotechnology company’s stock.

Several other analysts have also recently commented on the stock. Redburn Partners assumed coverage on Gilead Sciences and issued a “neutral” rating on the stock. Credit Suisse Group reduced their target price to $65 from $70 and set a “neutral” rating on the stock.

In addition, SVB Leerink reduced their target price to $79 from $88 and set an “outperform” rating on the stock. Truist Financial cut their price target to $62 from $67. At last, UBS Group assumed coverage and set a “neutral” rating and a $61 price target on the stock.

Upside and Downside Risks

Risks to Upside: Better than expected pipeline success on key late-stage drugs – highlighted by Morgan Stanley.

Risks to Downside: Failure of Trodelvy to achieve significant market penetration & failure to meaningfully expand label. Unexpected competition in HIV. Failure of CAR-T to achieve significant market penetration & failure to meaningfully expand CAR-T label. Significant delays with regulatory progress for JAK inhibitor filgotinib.

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