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Gilead stock is not out of room to run just yet: Truist

By:
on Oct 29, 2022
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  • Truist says Gilead stock is a "buy" with upside to $91 a share.
  • Analyst Robyn Karnauskas is bullish on its oncology pipeline.
  • Shares of the biotech firm already ended 20% up this week.

Gilead Sciences Inc (NASDAQ: GILD) ended this week up nearly 20% after reporting its quarterly results that handily topped Street estimates and subsequently winning an upgrade from a Truist analyst.

Gilead stock could climb another 15%

Robyn Karnauskas now sees upside in the biotech firm to $91 – up another 15% from here.

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She recommends buying Gilead stock primarily for its “undervalued” oncology pipeline. In 2020, Gilead partnered with Arcus Biosciences to develop a chemotherapy-free treatment for lung cancer.

Street expects that regimen of three drugs to peak at $200 million in adjusted sales. Karnauskas, though, is convinced it could eventually be bringing in $1.50 billion for Gilead Sciences Inc.

Oncology is where we are differentiated vs the Street. We believe GILD has a unique oncology platform; we expect the pipeline to continue to emerge and grow over the next 12 to 18 months.

Gilead stock currently sits at a year-to-date high.

Gilead Sciences raised its full year outlook

Other than that, Karnauskas is also bullish on Trodelvy – Gilead’s breast cancer drug that she said has potential to generate as much as $4.5 billion in annual sales.

Nonetheless, the Truist analyst does acknowledge that oncology could take a little bit of time to play out. In the meantime, she expects the core “HIV” business to drive growth, especially after Gilead raised prices for Biktarvy and Descovy earlier in 2022.

On Friday, the Nasdaq-listed firm raised its outlook for the full year. It now forecasts $25.9 billion to $26.2 billion in sales on up to $3.55 of earnings per share.

Gild stock also pays a dividend yield of 3.68%.