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Gilead Will Be a Buy at ‘Some Point.’ Some Point Isn’t Now.

Gilead may have another tough year in 2018.


It's been a tough year for Gilead Sciences (GILD), down 3% in the past 12 months, but even with that disappointing show expectations may still be too high for the stock, warns Credit Suisse.

Analyst Alethia Young and her team reiterated a Neutral rating and $80 price target on Gilead Wednesday, warning that estimates on the buy side (asset managers, institutional investors) are still above her 2018 forecast.

Young lowered her Hepatitis C figures for the year from $4.6 billion to $3.2 billion, and although she's gotten plenty of questions about it from investors, she believes caution is the right course, as global sales will be weak, due to  new competition.

That said, she is still positive about its HIV offerings, including the new bictegravir and ongoing TAF success, and she thinks other investors are thinking the same. As for Gilead's cancer treatments from it Kite acquisition:

As it relates to Yescarta (CAR-T product), the general sentiment is that the launch in 2018 will not be a big driver to the GILD story. Therefore, if the launch does go faster than consensus at $202M, we think that it would be upside to GILD shares. Overall, investors agreed with us that 2018 likely reflects a bottoming of revenues and earnings. Beyond 2018, we think (and investors agreed) that the company can likely growth post this bottoming in 2018 which will likely create an attractive buying opportunity at some point. 

Gilead is down 0.8% to $73.50 just after the start of trading.

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