Gilead Sciences, Inc.

GILD Details

Gilead Sciences, Inc. (NASDAQ: GILD) discovers and commercializes treatments to treat life-threatening infectious illnesses, focusing on Human Immunodeficiency Virus/Acquired Immune Deficiency Syndrome (HIV/AIDS), liver diseases, cancer, inflammatory and respiratory diseases, and cardiovascular ailments. GILD has a global presence in over 35 countries, with headquarters in Foster City, California.

Latest News:

• Positive Phase 2b Study: On November 10, 2021, GILD and Everest Medicines, a biopharmaceutical company focused on developing and commercializing pharmaceutical products, announced the Phase 2b EVER-132-001 study of sacituzumab govitecan met its primary endpoint of overall response rate (ORR) in metastatic triple-negative breast cancer (TNBC).
• Interim Results of BICSTaR study: GILD reported intermediate data from the ongoing BICSTaR trial on October 29, 2021, which is meant to investigate the antiviral activity and safety profile Biktarvy in 1,135 HIV patients. The findings emphasize the necessity of collecting patient-reported outcomes to understand the influence on persons living with HIV's mental health condition, health-related quality of life, and treatment satisfaction.

9MFY21 Results:

• Expansion in Revenues: GILD reported an increase of 16.17% in total revenues to USD 20.06 billion during 9MFY21 compared to USD 17.27 billion during 9MFY20, primarily due to increased sales of Veklury.
• Surge in Net Income: The net income during 9MFY21 was USD 5.83 billion vs. a loss of USD 1.46 billion reported during 9MFY20.
• Leveraged Balance Sheet: As of September 30, 2021, the company had cash and cash equivalents (including marketable securities) of USD 5.74 billion and total debt of USD 27.69 billion.

Key Risks:

• Exchange Rate Fluctuation Risk: In Q3FY1 and Q3FY20, 26% and 22% of total product sales were generated outside of the United States, respectively. GILD is often vulnerable to changes in foreign currency exchange rates, particularly the Euro. As a result, any adverse movement in the exchange rate would damage the company's bottom line.

Outlook:

• FY21 Estimates: As of October 28, 2021, GILD expects its FY21 product sales to range between USD 26.0 – 26.3 billion, including Veklury sales to the tune of USD 4.5 – 4.8 billion. It further predicts its GAAP EPS to range between USD 5.50 – 5.70, along with a non-GAAP EPS of USD 7.90 – 8.10.

Valuation Methodology:  Price/Earnings Per Share Multiple Based Relative Valuation

(Analysis by Kalkine Group)

* % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

GILD Daily Technical Chart (Source: REFINITIV)

Stock Recommendation: GILD's stock price has decreased by 2.49% only in the past six months and is currently leaning towards the higher band of the 52-week range of USD 56.56 to USD 73.34. The stock is currently trading below its 50 and 200 DMA levels, and its RSI Index is at 50.33. We have valued the stock using the Price/Earnings-based relative valuation methodology and arrived at a target price of USD 75.27.

Considering the stability in the stock price over the past six months, decent fundamentals, encouraging outlook, and associated risks, we recommend a "Hold" rating on the stock at the current price of USD 67.35, down 0.19% as of November 15, 2021, 2.24 PM ET.

* All forecasted figures and Industry Information have been taken from REFINITIV.

*The reference data in this report has been partly sourced from REFINITIV.