BMO Capital has maintained its Outperform rating and $94.00 price target on shares of Gilead Sciences (NASDAQ: NASDAQ:GILD).
The affirmation of the stock's rating and target comes despite recent challenges faced by the biopharmaceutical company, particularly in its solid tumor oncology division.
Gilead Sciences recently made the decision to voluntarily withdraw Trodelvy from the U.S. accelerated approval process for second-line metastatic urothelial cancer (2LmUC).
The move was prompted by the outcomes of the Phase 3 TROPiCS-04 study, which did not demonstrate a statistically significant benefit.
The withdrawal of Trodelvy highlights the competitive nature of the 2LmUC indication and emphasizes the ongoing difficulties within Gilead's solid-tumor franchise.
The analyst from BMO Capital noted the need for clarity regarding the company's strategy moving forward, especially considering the importance of other aspects of the business, such as cell therapy and HIV treatments, in shaping investor sentiment.
Despite the setback with Trodelvy, BMO Capital's maintained rating and price target indicate a continued positive outlook for Gilead's overall business prospects. The company's broader portfolio, which includes cell therapy and HIV, remains a focal point for the firm's assessment of the stock's potential.
In other recent news, Gilead Sciences has been the subject of several analyst reports. TD Cowen sustained its Buy rating on Gilead, with adjustments made to revenue projections for Veklury and the total liver disease franchise.
The firm's non-GAAP earnings per share (EPS) estimate for the third quarter is set at $1.75. Leerink Partners upgraded Gilead's stock from Market Perform to Outperform, following positive Phase 3 results for the HIV drug lenacapavir, while Wells Fargo (NYSE:WFC) maintained its Overweight rating on Gilead, projecting Veklury sales around $260 million.
Gilead's HIV drug, lenacapavir, demonstrated a significant 96% reduction in HIV infections in a Phase 3 trial. The company plans to file for lenacapavir approval by the end of 2024. In addition, Gilead reported a 6% year-over-year rise in total product sales, driven by an 8% rise in sales for its HIV treatment, Biktarvy, and a 23% increase for the oncology drug, Trodelvy.
TD Cowen continued to forecast approximately $1.4 billion in revenue from breast cancer indications for Gilead by 2025. Despite Gilead's decision to withdraw mUC indication from its Trodelvy label, TD Cowen maintained its Buy rating on the company.
Meanwhile, Leerink holds an optimistic view on the potential of anito-cel, a therapy for cancer, and sees an opportunity for Gilead to improve the market's current view of its oncology offerings with upcoming Phase 3 results.
InvestingPro Insights
Despite the recent setback with Trodelvy, Gilead Sciences (NASDAQ:GILD) continues to show financial resilience. According to InvestingPro data, the company boasts a substantial market capitalization of $107.97 billion, underscoring its significant presence in the biotechnology sector. Gilead's revenue for the last twelve months stands at $27.8 billion, with a modest growth of 1.54%, indicating stable performance amidst challenges.
InvestingPro Tips highlight Gilead's strengths, noting that the company has raised its dividend for 9 consecutive years, demonstrating a commitment to shareholder returns. This is further supported by a current dividend yield of 3.55%, which may appeal to income-focused investors. Additionally, Gilead's stock has shown strong momentum, with a 20.63% price total return over the past three months and a 32.72% return over six months, aligning with BMO Capital's optimistic outlook.
The company's financial health is further evidenced by its ability to generate sufficient cash flows to cover interest payments, as pointed out by another InvestingPro Tip. This financial stability could provide Gilead with the flexibility needed to navigate challenges in its oncology segment while continuing to invest in its HIV and cell therapy businesses.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and insights, with 11 more tips available for Gilead Sciences. These additional insights could prove valuable for those looking to make informed decisions about GILD stock in light of recent developments and the company's strategic direction.
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