Why One Analyst Sees Gilead Worth 66% More

Health and Healthcare

Published: March 16, 2016 11:20 am

Last Updated: January 13, 2020 11:53 am

Gilead Sciences Inc. (NASDAQ: GILD) has been touted by many analysts as being a great value stock with serious upside ahead. Gilead remains the top biotech stock that remains well under its highs and potential. On Wednesday, independent research firm Argus issued a research report on the stock. It might seem in line that Gilead was reiterated as Buy. What really matters here is that Argus has a $150 price target.

If that target manages to prove accurate, then Gilead has upside nearing 67%. Investors need to consider that this is higher than all other analyst targets.

Note that many of the analysts see some of the same reasons for valuing Gilead stock much higher. That being said, this $150 target is more than 10% higher than the next highest brokerage firm analyst target.

Argus sees strong prospects for Harvoni. The firm’s Buy rating reflects the stock’s attractive valuation and the company’s solid position in the market for hepatitis C and HIV drugs. Harvoni was Gilead’s top-selling product in 2015, and sales now appear to be stronger than initially expected for 2016. Argus also said that Harvoni has seen substantial prescription growth for Genvoya, a recently launched HIV drug with a favorable safety profile.

As for the valuations, Argus noted that Gilead is attractively valued at just 7.2 times the firm’s 2016 EPS estimate. That is less than half of the peer stock valuations at roughly 15 times estimates.