Gilead Sciences Inc. (NASDAQ: GILD) reported fourth-quarter earnings after markets closed on Tuesday. The stock hit a new multiyear low on Wednesday and pushed even lower on Thursday to a price level not seen since 2014. Analysts took this opportunity to slash their price targets, reflecting falling hepatitis C vaccine (HCV) sales, a decline that is expected to continue.

24/7 Wall St. has included some of the key points from this earnings report, as well as some highlights from two key analysts’ reports and what others are saying after the report.

This biotech giant posted $2.70 in earnings per share (EPS) and $7.3 billion in revenue, compared with consensus estimates from Thomson Reuters that called for $2.61 in EPS and revenue of $7.15 billion. In the same period of last year, Gilead posted EPS of $3.32 and $8.51 billion in revenue.

In terms of guidance for the 2017 full year, the company expects to see net product sales between $22.5 billion and $24.5 billion. Non-HCV sales are expected to be in the range of $15.0 billion to $15.5 billion, while HCV product sales are expected to be in the range of $7.5 billion to $9.0 billion. The consensus estimates are $10.68 in EPS and $28.07 billion in revenue for the current year.

For the fourth quarter, Gilead’s segments reported as follows:

• HIV and other antiviral product sales for the fourth quarter of 2016 were $3.4 billion, compared to $3.0 billion for the same period in 2015.
• HCV product sales, which consist of Harvoni, Sovaldi and Epclusa, were $3.2 billion for the fourth quarter of 2016, compared to $4.9 billion last year.
• Other product sales, which include Letairis, Ranexa and AmBisome, were $621 million for the fourth quarter of 2016, compared to $523 million.

Credit Suisse maintained an Outperform rating but cut its price target to $79 from $97. The firm said that this was a big step down in 2017 HCV guidance and that M&A may be the driver of upside from here. The HCV treatment numbers are coming down faster than expected. Credit Suisse’s new product sales for 2017 and 2018 are $24.3 billion and $21.1 billion, respectively, versus the previous levels of $26.0 billion and $23.6 billion. EPS is significantly lower as well.

Merrill Lynch reiterated a Neutral rating and lowered its price objective to $76 from $88. The brokerage firm detailed in its report:

Given the faster than expected decline in HCV sales, we believe investors expect urgency from management in acquisition of external assets to return Gilead to growth. Despite the scarcity of promising late-stage or marketed products, we anticipate Gilead to explore multiple partnerships/acquisitions instead of a transformative deal. Although Gilead trades at a significant discount to its peers, we believe the lack of growth is already reflected in the share price.

Merrill Lynch noted that fourth-quarter revenues and EPS beat the overall consensus, but 2017 HCV guidance suggests 39% to 49% decline in HCV sales from 2016 levels. At the same time, HIV growth slows down in 2017 on patent expiration of Viread in the European Union. Given the faster-than-expected HCV decline, Merrill Lynch believes that Gilead will hunt for partnerships or acquisitions in 2017.

A few other analysts weighed in on Gilead as well:

• Baird lowered its price target to $87 from $100.
• Citigroup downgraded it to Neutral from Buy and lowered the target to $76 from $87.
• Cowen cut its price target to $90 from $100.
• Goldman Sachs has a Neutral rating and lowered its price target from $81 to $70.
• JPMorgan lowered the price target to $82 from $96.
• Jyske Bank downgraded it to Buy from Strong Buy with a $90 price target.
• Leerink has a Market Perform rating and lowered its price target to $74 from $91.
• Morgan Stanley lowered the price target to $77 from $85.
• Piper Jaffray lowered the price target from $102 to $95.
• RBC lowered its price target from $90 to $75.
• Stifel lowered the price target to $87 from $100.

Shares of Gilead were closed at $66.36 on Friday, with a consensus analyst price target of $84.27 and a 52-week trading range of $65.38 to $103.10.

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