Credit Suisse Cuts Gilead Price Target To $95

Gilead Sciences, Inc. GILD shares have dipped 22 percent year-to-date, mostly driven by concerns regarding sustainable levels for the company’s HCV franchise.

Credit Suisse’s Alethia Young maintained an Outperform rating on the company, while lowering the price target from $115 to $95. She believes that at the current valuation levels, any success or increase in confidence in the pipeline could lead to upside in the long term.

“We see floor values on GILD shares of $60-$70/sh based on HIV value & our thoughts on HCV worst case scenarios,” the analyst mentioned.

Consensus Too High

Young believes that the consensus HCV expectations could prove too high. The estimate is $2 billion below consensus, at $9 billion for 2020.

“We are lowering our HCV revenues because we think street estimates are still too high considering continued price and market share pressure,” the analyst explained.

Pressure On Market Share

Young expects sustained pressure on market share and pricing due to competition driving prices down, healthier patients getting 8 weeks versus 12 weeks, as well as modest market share loss due to competition.

The 2020 market share estimate for U.S. and Japan have been lowered from 80 percent to 75 percent, while the Europe estimate has been lowered from 80 percent to 65 percent.

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