If you just looked at formal Buy and Sell ratings from Wall Street analysts, you might assume that everything is still fine and hopeful for Gilead Sciences Inc. (NASDAQ: GILD). Things look a bit different if you break down the earnings report and look at the price target trends from the analysts covering the stock.

What investors have to be concerned with is that Gilead’s hepatitis C drug sales were lower than expected, with Harvoni and Sovaldi sales down in the third quarter and missing estimates. What then has to be considered is a strategy for Gilead longer term: should it invest more heavily in research and development for an organic pipeline growth years out, or should it go out and make an acquisition (or acquisitions) that immediately will bring a sales boost and immediately expand its pipeline?

24/7 Wall St. tracked many analyst ratings after Gilead’s earnings. Many kept formal positive ratings like Buy, Outperform and Overweight, while simultaneously lowering their price targets. Other analysts just maintained their cautious ratings. Gilead did receive at least one analyst upgrade as well.

BMO Capital Markets was a standout with an upgrade of its rating to Outperform, but even it lowered its price target to $84 from $98.

Credit Suisse maintained its Outperform rating but lowered the target to $90 from $95. The firm noted that there are still headwinds on Harvoni, and the price target was lowered due to drug pipeline updates, despite HIV drugs continuing to look positive.

Other analysts maintaining positive ratings but lowering their price targets were as follows:

• Barclays kept its Overweight rating but cut its price target to $105 from $115.
• Cowen has an Outperform rating but cut its target to $100 from $120.
• Jefferies maintained its Buy rating but cut its target to $91 from $95.
• Piper Jaffray maintained its Overweight rating but cut its target to $102 from $108.
• RBC Capital Markets maintained its Outperform rating but cut its target to $90 from $95.
• S&P Capital IQ maintained its Strong Buy rating but slashed its target price to $105 from $125.

Gilead Sciences was also maintained as Market Perform at Leerink after a recent downgrade, but even with a less aggressive rating the firm cut its price target to $89 from $94.

Merrill Lynch maintained its Neutral rating but kept its price objective at $88. Here is how Merrill Lynch talked about Gilead’s M&A and dividend strategy:

Comments made by CEO, Dr. John Milligan, on the call reinforce our belief that Gilead is not rushing into any large scale acquisitions until the company finds a value-creating opportunity that affords dominant position in a large market. On the other hand, a much higher dividend than current 2.5% yield is not in the game plan as Gilead continues to scout for external assets and needs flexibility on the balance sheet. … We rate Gilead Neutral as we believe the pricing trend and patient volume are both stabilizing in the HCV market, although the uncertainty around long-term growth remains.

Gilead shares were trading up about 1% at $72.43 on Friday’s close, but that was after hitting a 52-week low of $71.40 on the same day. The 52-week high is $109.37. Late on Friday, Gilead’s consensus price target from Thomson Reuters was down at $96.51. That consensus target was $102.94 just 30 days ago and was $105.53 some 60 days ago.

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