Gilead Sciences Price Target Trimmed Following A Sobering Q3

Shares of Gilead Sciences, Inc. GILD were trading lower Wednesday after the company's third quarter results fell short of Wall Street's expectations.

Following the earnings report, Brian Abrahams of Jefferies lowered the price target to $91 from $95. The analyst noted his Buy rating remains intact given the stock's "depressed" multiple.

Abrahams noted that Gilead's U.S. Harvoni sales of $1.1 billion in the quarter fell short of his expectations of $1.2 billion. However, management's commentary of the market suggested a potential stabilization over the medium-term. On the other hand, poor trends in the international market on volume and price led the analyst to reduce his out-year estimates.

Abrahams stated that sales of Epclusa and Sovaldi looked strong at $1.5 billion, which exceeded the consensus estimate of $1.3 billion.

Legacy HIV products were "soft to in line" in the third quarter, but the company's TAF regiment update which is key for the long-term sustainability of the franchise remains "solid."

Finally, the analyst believes that as the Street "digests more realistic HCV tail assumptions the focus will more clearly shift to favorable HIV dynamics and progress with GILD's underappreciated pipeline."