Why This Gilead Analyst Believes The Stock Is Highly Undervalued

While there is increased visibility for Gilead Sciences, Inc’s GILD HIV franchise, its emerging oncology franchise is not well reflected in its valuation, according to JPMorgan.

The Gilead Sciences Analyst: Chris Schott upgraded the rating for Gilead Sciences from Neutral to Overweight, while raising the price target from $72 to $80.

The Gilead Sciences Thesis: The company’s HIV franchise is likely to grow at a low single-digit CAGR (compounded annual growth rate) through the early 2030s, Schott said in the upgrade note.

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“At current levels, we see GILD’s HIV business alone supporting the stock’s entire market cap,” the analyst wrote. “And with an oncology franchise that we forecast to reach ~$5bn in sales by 2030 as well as potential upside to lenacapravir estimates over time, we see shares as clearly undervalued at current levels,” he added.

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“Finally, while GILD’s acquisition track record represents a point of controversy in the story, we see the company’s capital deployment priorities pivoting to smaller, tuck-in acquisitions going forward,” Schott further mentioned.

GILD Price Action: Shares of Gilead Sciences had risen by 3.35% to $64.40 at the time of publication Tuesday.