Gilead Sciences, Inc. (NASDAQ: GILD)
Gilead Sciences is arguably the most interesting success story in the world of biotech at the moment. However, there has been a major issue helping to keep their stock down. That issue is competition. Nonetheless, I’m a firm believer that this stock is likely to move in a big way; and that we’re seeing the start of it as we speak. I’ve said it time and time again; and my view hasn’t changed in the slightest… GILD is incredibly undervalued. However, that undervaluation isn’t likely to last forever. Today, we’ll talk about how Gilead Sciences eased fears revolving around competition, what we’re seeing in the market today, and what we can expect to see moving forward. So, let’s get right to it…
Gilead Sciences Shows That Fears Are Unwarranted
For the most part, this year has been the year of fear for GILD investors; and for good reason. Earlier this year, AbbVie, Inc. (NYSE: ABBV) moved in to take a slice of the Gilead Sciences hepatitis C treatment pie by releasing their own treatment for the ailment. Unfortunately for Gilead Sciences, the AbbVie treatment was picked up by several insurance carriers based on the lower price; leading to concerns that GILD would start to see declines in the value of its hepatitis C franchise. However, Gilead Sciences may have put those concerns to rest.
Recently, GILD released their earnings report for the second quarter; and as I predicted, the company blew away all expectations! While analysts expected the company to report earnings per share of $2.71, the company actually reported $3.15. This showed investors that even with stiff competition in the HCV space, they are still more than capable of generating earnings.
What We’ve Seen In The Market From GILD
Since the earnings report, Gilead Sciences has been on a relatively bullish run; and today, the stock has climbed to resistance and is working to break through. Currently (12:17), GILD is trading at $119.22; just pennies away from resistance. As soon as the stock climbs above $119.60, I’m expecting for investors to get excited; pushing GILD to new heights.
What We Can Expect To See Moving Forward
Moving forward, I’ve got overwhelmingly positive opinions of Gilead Sciences in both the short and long term. The reality is that the company has proven that even in the face of strong competition, they are capable of generating solid revenues and earnings for their investors. Not to mention, the recent regulatory approval in Japan is likely to lead to strong sales figures with regard to Harvoni; the company’s hepatitis C treatment. So, in the short run, we can expect for investors to work to push this stock up to a valuation it deserves. In the long run, we can expect to see that deserved valuation rise as Harvoni continues to climb!
What Do You Think?
Where do you think GILD is headed and why? Let us know your opinion in the comments below!