Baird Remains Buyers of Gilead Before Earnings Release

In a report this morning, analysts at Baird stated that they remain buyers of Gilead Sciences

before the fourth quarter earnings call next Tuesday, February 3. Investors have been concerned that Gilead might disappoint after pricing concerns in the Hep C market. The analysts stated, "We expect Gilead's HCV franchise to return to form to close out 2014 after approval of Harvoni early on in the quarter has reversed the secondary warehousing effect of HCV patients. Our prescription trend analysis throughout the quarter indicates Sovaldi and Harvoni sales in the U.S. alone of $1.2B and $2.0B, respectively." The analysts also expect that a major topic of discussion will be HCV pricing competition between AbbVie

and Express Scripts

. The analysts stated, "We don't expect to get definitive read-through on the actual magnitude of discounts until next quarter's update but we believe Gilead's discount is likely trending towards 25%." The consensus fourth quarter EPS estimate is expected to be $2.17, however Baird analysts estimate $2.28 EPS. If the fourth quarter EPS comes in at $2.28, that would put Gilead at $7.90 EPS for 2014. The firm rates Gilead an Outperform and has a $126 price target.