Mizuho: these two biotech stocks are worth buying right now

By: Wajeeh Khan
Wajeeh Khan
Wajeeh is a News Reporter at Invezz covering the European, Asian and North America stock markets. Wajeeh has 5… read more.
on May 9, 2022
  • Selim Syed sees a more than 20% upside in Gilead Sciences stock.
  • The Mizuho analyst explains why Cytokinetics is a buy right now.
  • The SPDR S&P Biotech ETF is now down about 45% year-to-date.

Biotech is one of the hardest hit sectors this year, with the SPDR S&P Biotech ETF now down 45% year-to-date. Still, a Mizuho analyst says the following two stocks are worth buying.

Syed sees significant upside in Gilead Sciences

A large cap name that pops out to Selim Syed in biotech is Gilead Sciences Inc (NASDAQ: GILD), down roughly 15% year-to-date. Speaking with CNBC’s Brian Sullivan on Monday, he said:

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Gilead trades close to our DCF values. It’s currently the best in class on a free cash flow yield basis. So, we like it primarily on valuation, but it’s hard to pinpoint what catalyst will get this stock going.

Syed has a price target of $75 a share on Gilead Sciences that represents a more than 20% upside from here. A week ago, GILD reported market-beating results for its fiscal Q1.

Syed’s favourite small-cap biotech stock

A biotech stock that the Mizuho analyst likes more than Gilead Sciences, however, is the California-based small cap, Cytokinetics Inc (NASDAQ: CYTK). On CNBC’s “Worldwide Exchange”, Syed noted:

Cytokinetics has a drug for a cardiovascular disease. It trades at about $3.50 billion. The clinical data so far seems to support valuation that could be much higher than where it’s currently trading.

CYTK is down nearly 25% versus the start of the year. In late 2020, Bristol Myers Squibb bought a similar clinical stage biopharmaceutical company, MyoKardia, for $13 billion.

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