Leerink Raises Gilead Target To $130 On New HIV Outlook

Leerink’s Geoffrey C. Porges maintained an Outperform rating for Gilead Sciences, Inc. GILD, while raising the price target from $125 to $130. The analyst said that the company’s new HIV franchise outlook reflected TAF adoption.

Gilead Sciences dominates the market for two life threatening viral diseases, namely HIV and HCV.

Improved Outlook For HIV Franchise

The outlook for the company had improved in recent months, given the good response to its next generation of HIV treatments. “This trend, along with the potential of its future HIV medicines, means that its antiviral product sales could be flat though 2020,” analyst Geoffrey Porges wrote.

He added, “Central to our core thesis regarding the HIV franchise is a positive outlook on the next-generation TAF-containing products near-term and those based on GS9883 mid- to long-term.”

Porges expects Gilead Sciences’ HIV revenue to grow from $11.1 billion in 2015 to $20.5 billion in 2020. In case both D/C/F/TAF and GS9883/F/TAF succeed, the revenue forecast for 2020 would increase to $23 billion.

The settlement of the conversion obligation on the company’s 2016 notes will result in a reduction of the share count by 75 million shares from 4Q15 to 2Q16. “This share count reduction has a material positive impact on our expected earnings and valuation for Gilead’s stock,” the analyst mentioned.