Gilead Sciences, Inc.

GILD Details

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

Latest News:

• Approval of Veklury: On January 21, 2021, GILD announced that the US Food and Drug Administration (FDA) had granted expedited permission of a supplemental new drug application (sNDA) for Veklury (remdesivir) for the treatment of non-hospitalized adult and adolescent patients who are at high risk of progression to severe COVID-19, including hospitalization. This approval broadens the role of Veklury, which is the antiviral standard of care for treating COVID-19 patients hospitalized.

9MFY21 Results:

• Growth in Revenues: GILD reported a 16.17% rise in total revenues to USD 20.06 billion during 9MFY21 (ended September 30, 2021) compared to USD 17.27 billion during 9MFY20, principally owing to increased Veklury sales.
• Rise 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 firm has USD 5.74 billion in cash and cash equivalents (including marketable securities) and total debt of USD 27.69 billion.

Key Risks:

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

Outlook:

• FY21 Estimates: As of October 28, 2021, GILD anticipates FY21 product sales of USD 26.0 – 26.3 billion, including Veklury sales of USD 4.5 – 4.8 billion. It also forecasts GAAP EPS of USD 5.50 – 5.70 and 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 fallen 1.72% only in the past six months and is currently leaning towards the mid-band of the 52-week range of USD 61.39 to USD 74.12. The stock is currently trading below its 50 and 200 DMA levels, and its RSI Index is at 29.88. We have valued the stock using the Price/Earnings-based relative valuation methodology and arrived at a target price of USD 75.72.

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 67.57, down 1.37% as of January 24, 2022, 3:08 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.

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