What to Expect From Gilead Sciences Earnings

Gilead Sciences Inc. (NASDAQ: GILD) is scheduled to release its second-quarter financial results after the markets close on Monday. Within just the past month, the stock hit a 52-week low and then subsequently bounced and made a slight recovery, but there is still more to make up for this year. And the company hopes to do that with this earnings report.

The consensus estimates from Thomson Reuters are $3.02 in earnings per share (EPS) on $7.79 billion in revenue. In the same period of last year, the biotech giant posted EPS of $3.15 and $8.24 billion in revenue.

In the first quarter of 2016 alone, Gilead spent $8.0 billion on buybacks, coming to a total of $14.101 billion for the trailing 12 months. This was part of a $12 billion buyback plan, which was meant to follow the completion of the previous $15 billion authorized share buyback plan. How ironic is it that the world’s largest biotech outfit is outspending the largest drug companies on buybacks? If Gilead is an opportunist, maybe it is taking advantage of its shares being down 11% in the past three months or so.

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Gilead recently was given a zero-pipeline valuation of roughly $75 to $80. That compares to a current share price of roughly $87, but it is important to understand that Gilead may have the largest discount of all the biotechs due to its huge price tag for its hepatitis C drugs.

Earlier in the second quarter, Gilead’s shares made a handy gain just off of their 52-week low, following the release of preliminary data from its HIV treatment. This data came from four pre-clinical and Phase 1 studies evaluating bictegravir (GS-9883), a novel, unboosted, investigational once-daily integrase strand transfer inhibitor (INSTI). Overall, the studies examined the antiviral potency, resistance profile, pharmacokinetics and safety of bictegravir, and the results were presented this weekend during a poster session at the American Society of Microbiology (ASM) Microbe 2016 Conference in Boston.

A few analysts weighed in on Gilead ahead of the earnings report:

• Jefferies reiterated a Hold rating with a $97 price target.
• Maxim Group reiterated a Hold rating.
• Cowen reiterated an Outperform rating with a $125 price target.
• Credit Suisse reiterated a Buy rating with a $120 price target.
• Leerink Swann reiterated an Outperform rating with a $127 price target.
• BMO Capital Markets reiterated an Outperform rating with a $97 price target.

So far in 2016, Gilead has underperformed the broad markets with the stock down about 14% in this time. Over the past 52 weeks, the stock is actually down about 25%.

Shares of Gilead were trading at $86.93 in Monday’s premarket, with a consensus analyst price target of $110.37 and a 52-week trading range of $77.92 to $120.37.

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