Gilead Post Earnings: Here's What One Bull And One Bear Are Saying

Shares of Gilead Sciences, Inc. GILD were trading higher by more than four percent Wednesday morning after the company reported better-than-expected earnings for its second quarter. Here is opposing views of what two of Wall Street's top analysts are saying. Bank Of America: Long-Term Concerns Remain, Company In No M&A Rush Ying Huang of Bank of America commented in a note that Gilead's beat was driven by US Sovaldi sales and global Harvoni sales while the HCV franchise also delivered a beat with sales of $4.899 billion, $590 million higher than the Street was estimating. Huang noted that HCV sales are expected to "slow down" in the bottom half of the year and "the peak is now behind us" with declining warehoused patient demand and a market size. The analyst also stated that following the earnings release, Gilead is "in no rush" to pursue any "transformative" acquisitions to "reinvigorate" its growth. In fact, "patience can be a virtue" if Gilead is hunting for the right deal that really is transformative. On the other hand, Huang stated that he "would not be surprised" if Gilead continues to pursue early stage partnerships or bolt-on acquisitions in oncology and liver diseases. Shares remain Underperform (due to long-term concerns on the sustainability of the company's HIV and HCV franchises) rated with a price target raised to $107 from a previous $101. Barclays: ‘Compelling' Trends In Hep C, Growth From Other Areas Geoff Meacham of Barclays commented in a note that Gilead's "robust" results were "differentiated" in the large cap biotech space and shows a franchise that has "multiple growth levers." Meacham continued that "not surprisingly," hep C is "driving most of the upside" and should continue. Meanwhile, the analyst noted management's tone during the post earnings conference call was "as confident as we can recall in recent history" as the company raised its sales guidance by $1 billion and offered a "robust" hep C outlook for EU growth and strong US demand. Bottom line, the analyst sees "compelling" trends in the hep C business while the company will also growth from the HIV business which is expected to "intensify" with the rollout of TAF this fall. Shares remain Overweight rated with a price target raised to $130 from a previous $125.