What to Expect When Gilead Reports

Print Email

Gilead Sciences Inc. (NASDAQ: GILD) is scheduled to release its second-quarter financial results after the markets close on Wednesday. The Thomson Reuters consensus estimates of $1.56 in earnings per share and $5.21 billion in revenue compare with the $2.56 in per share and $7.14 billion posted in the same period of last year.

Gilead was supposed to be coming back as a company on the heels of its first major acquisition in years. Unfortunately for the company and its shareholders, the reaction from the last earnings report was no help at all.

Following its last earnings report, a couple of analysts gave their thoughts on the biotech giant.

Merrill Lynch maintained its Neutral rating but lowered its price objective to $78 from $87. The firm noted that HCV sales were hurt by competition from AbbVie, while HIV drug sales were negatively affected by an inventory drawdown. Yescarta was said to be the silver lining, with first-quarter sales of $40 million more than doubling expectations, but this is a tiny drop in the bucket for a company that will have $20 billion or so in revenues.

Credit Suisse maintained its Neutral rating and $80 price target. The firm noted that Gilead missed revenue expectations, as HIV inventory had an impact on results, at the same time it reaffirmed its product sales guidance. Credit Suisse believes investors are skeptical of that guidance, and it lowered its HIV and HBV revenue estimates by about a billion to $14 billion in 2018. Still, the firm feels that Gilead’s strong cash position allows the company significant flexibility to grow its revenues in the near term.

However, since Gilead’s first-quarter fumble, the stock has seen a solid gain. Its shares are up about 8% year to date, and they are up about 9% in the past month alone. Over the past 52 weeks, the stock is up only 4%.

Shares of Gilead were last seen trading at $78.19, with a consensus analyst price target of $86.17 and a 52-week range of $64.27 to $89.54.