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Valued at a market cap of $98.6 billion, Gilead Sciences, Inc. (GILD) discovers, develops, and commercializes medicines in the areas of unmet medical need. The California-based company is a pioneer in developing drugs for the treatment of human immunodeficiency virus, liver diseases, hematology/oncology diseases, and inflammation/respiratory diseases.
Companies valued at $10 billion or more are generally labeled as “large-cap” stocks, and Gilead Sciences fits this criterion perfectly. Gilead Sciences is working on diversifying and growing its business beyond antivirals into other therapeutic areas through strategic collaborations and acquisitions and research and development programs.
Despite experiencing a 10.8% decline from its 52-week high of $87.86, reached in January, shares of this biopharmaceutical company have gained 22.7% over the past three months, outpacing the Dow Jones Industrials Average’s ($DOWI) 5.3% return over the same time frame.
However, longer term, GILD stock is down 3.2% on a YTD basis, lagging behind DOWI’s 8.5% gains. Moreover, shares of GILD have gained 4.3% over the past 52 weeks, underperforming DOWI’s 18% return over the same time frame.
Yet, GILD has been trading above its 200-day moving average since late July and has remained above its 50-day moving average since late June, indicating a bullish trend.
GILD faced major headwinds in the first half of 2024. The stock fell nearly 10% on Jan. 22 following the failure of its key drug-Trodelvy to prolong the lives of lung cancer patients. This setback dampened investors' confidence and challenged Gilead's aspirations in the oncology space. However, the stock surged 8.5% on Jun. 20 after reporting encouraging results from a phase 3 trial of its newest HIV prevention medication.
Nevertheless, despite delivering better-than-expected Q2 earnings results on Aug. 8, GILD’s shares dropped 2.6% the following day, primarily due to growth in revenues fueled by non-core products.
To emphasize the stock’s underperformance, its rival, Amgen Inc. (AMGN), has soared 29.1% over the past 52 weeks and gained 13.8% on a YTD basis, outpacing GILD’s performance over both time frames.
Despite GILD’s underperformance relative to the broader market over the past year, analysts are moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 26 analysts covering the stock, and the mean price target of $84.04 suggests a premium of only 6.2% to current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
