Performance Overview - Gilead Sciences Inc (GILD) shares gained 26.8% in the past six months, outperforming the industry's decline of 12.2% and the S&P 500 Index [1] - The company raised its annual guidance for sales and earnings during its third-quarter earnings release, driven by growth in Veklury (COVID-19 treatment) sales [2] HIV Franchise - Gilead's HIV therapy, Biktarvy, holds a market share of more than 49% in the United States and has increased its HIV sales target to 5% in 2024 from the earlier estimate of 4% [5] - Pipeline candidate lenacapavir demonstrated 100% efficacy for HIV prevention in cisgender women and could be a game-changing HIV prevention option [6][7] New Drugs and Collaborations - FDA granted accelerated approval to seladelpar (brand name Livdelzi) for the treatment of primary biliary cholangitis (PBC) in August 2024 [8] - Gilead acquired CymaBay Therapeutics Inc for $4.3 billion, adding seladelpar to its portfolio [9] - The company announced a strategic partnership with LEO Pharma to strengthen its inflammation research portfolio [11] - Gilead entered into a multi-target research collaboration with Terray Therapeutics and an exclusive option and license agreement with Tubulis [12] Oncology Franchise - Gilead's oncology portfolio, including the Cell Therapy franchise and breast cancer drug Trodelvy, faces challenges due to competitive headwinds [13] - Trodelvy's label expansion efforts suffered setbacks due to the failure of late-stage studies in urothelial cancer and non-small cell lung cancer [14] - FDA granted Breakthrough Therapy Designation to Trodelvy for the treatment of extensive-stage small cell lung cancer [15] Valuation and Estimates - GILD's shares currently trade at 12.13x forward earnings, lower than the large-cap pharma industry's average of 15.29 but higher than its mean of 10.43 [16] - The Zacks Consensus Estimate for 2024 earnings per share (EPS) has moved up 12 cents to $4.36 over the past 60 days [17] Strategic Partnerships - Gilead collaborated with Merck to evaluate the investigational combination of islatravir and lenacapavir for HIV treatment, showing promising results in maintaining viral suppression [20]

Group 1 - Gilead Sciences (GILD) stock closed at $92.38, with a daily increase of +1.52%, underperforming the S&P 500's gain of 1.83% [1] - Over the past month, Gilead's shares have decreased by 1.94%, while the Medical sector and S&P 500 have lost 3.48% and 3.31% respectively [1] - The upcoming earnings report on February 11, 2025, is expected to show an EPS of $1.67, a decrease of 2.91% year-over-year, with projected revenue of $7.05 billion, reflecting a 0.91% decline [2] Group 2 - Recent analyst estimate revisions indicate near-term business trends, with positive changes suggesting optimism about Gilead's profitability [3] - The Zacks Rank system, which incorporates estimate changes, currently ranks Gilead as 3 (Hold), with a consensus EPS estimate having increased by 0.03% over the past month [4][5] - Gilead's Forward P/E ratio is 12.05, indicating a discount compared to the industry average of 21.47 [6] Group 3 - Gilead has a PEG ratio of 1.28, which is lower than the average PEG ratio of 1.4 for Medical - Biomedical and Genetics stocks [7] - The Medical - Biomedical and Genetics industry holds a Zacks Industry Rank of 60, placing it in the top 24% of over 250 industries, suggesting strong performance potential [8]

Summary of Gilead Sciences, Inc. Conference Call Company Overview - **Company**: Gilead Sciences, Inc. (NASDAQ: GILD) - **Event**: JPMorgan Annual Healthcare Conference Call - **Date**: January 13, 2025 - **Key Participants**: - Daniel O'Day - Chairman and Chief Executive Officer - Johanna Mercier - Chief Commercial Officer - Stacey Ma - Executive Vice President, Pharmaceutical Development and Manufacturing - Andrew Dickinson - Chief Financial Officer - Flavius Martin - Executive Vice President, Research Core Insights and Arguments - **Current Position**: Gilead is in an exciting phase as of 2025, with a focus on framing its current standing in the market [3] - **Investment Strategy**: The company has undergone several years of high investments aimed at diversifying its portfolio and strengthening its approach to HIV treatment [4] - **Future Outlook**: Gilead anticipates a period of consistent execution where past investments will translate into commercial benefits, leading to growth in revenues and operational efficiency [4][5] Additional Important Points - **Financial Discipline**: The company emphasizes improved financial discipline as a key factor contributing to its operational efficiency [5] - **Forward-Looking Statements**: The presentation includes forward-looking statements, indicating a focus on future growth and performance [5]

Company Performance - Gilead Sciences (GILD) closed at $89.14, reflecting a -1.64% change from the previous day's closing price, underperforming the S&P 500 which gained 0.16% [1] - Over the past month, Gilead's shares have decreased by 3.51%, which is better than the Medical sector's decline of 5.31% and the S&P 500's loss of 2.7% [2] - The upcoming earnings report is scheduled for February 11, 2025, with an expected EPS of $1.67, indicating a 2.91% decline year-over-year, and a revenue forecast of $7.05 billion, down 0.88% from the previous year [3] Analyst Estimates - Recent changes in analyst estimates for Gilead Sciences reflect evolving short-term business trends, with positive revisions indicating analysts' confidence in the company's performance [4] - The Zacks Consensus EPS estimate has increased by 2.15% in the past month, and Gilead currently holds a Zacks Rank of 3 (Hold) [6] Valuation Metrics - Gilead Sciences has a Forward P/E ratio of 11.81, which is lower than the industry average Forward P/E of 22.58, indicating a valuation discount [7] - The company has a PEG ratio of 1.26, compared to the industry average PEG ratio of 1.5, suggesting a favorable growth outlook relative to its valuation [8] Industry Context - The Medical - Biomedical and Genetics industry, which includes Gilead, has a Zacks Industry Rank of 64, placing it in the top 26% of over 250 industries, indicating strong relative performance [9]

Core Insights - Gilead Sciences, Inc. (GILD) has experienced a positive shift in investor sentiment due to new drug approvals, encouraging pipeline developments, and strong quarterly results, leading to an increase in annual sales and earnings guidance driven by COVID-19 treatment Veklury sales [1] Group 1: HIV Franchise Performance - Gilead's leading HIV franchise continues to show momentum, with a market share exceeding 49% in the U.S. as of Q3, primarily driven by its flagship therapy, Biktarvy [5] - The company anticipates filing for approval of lenacapavir for HIV prevention by year-end, which could enhance its HIV franchise as it requires administration only twice a year compared to daily oral pills [3][15] - Gilead has raised its HIV sales target for 2024 to 5% from an earlier estimate of 4% due to strong performance in its HIV portfolio [5] Group 2: Drug Approvals and Acquisitions - Gilead's portfolio has been strengthened by the approval of additional drugs, including Livdelzi for liver disease, and the acquisition of CymaBay Therapeutics for $4.3 billion, which adds Seladelpar to its pipeline [6] - The FDA has granted accelerated approval for seladelpar for treating primary biliary cholangitis (PBC), with a final decision from the European Medicines Agency expected in Q1 2025 [16][17] Group 3: Oncology Challenges - Gilead's oncology franchise faces challenges, particularly with the breast cancer drug Trodelvy, which has seen setbacks in expanding its label due to failed late-stage studies [8][26] - Despite these challenges, Trodelvy has received Breakthrough Therapy Designation for treating extensive-stage small cell lung cancer [19] Group 4: Financial Performance and Estimates - Gilead's shares have increased by 15.4% over the past year, outperforming the industry, which has declined by 10.8% [4] - The Zacks Consensus Estimate for Gilead's 2024 earnings per share (EPS) has risen by 59 cents to $4.36, reflecting a positive trend despite acquisition-related expenses [21] - Gilead's current dividend yield of 3.38% is supported by a strong cash position of $5 billion as of September 30, 2024, indicating sustainability [12] Group 5: Strategic Collaborations - Gilead has entered a multi-target research collaboration with Terray Therapeutics to develop novel small-molecule therapies [7] - The company is also collaborating with Merck to evaluate a combination treatment of islatravir and lenacapavir for HIV, which has shown promising results in maintaining viral suppression [11]

Economic Outlook - The Federal Reserve is anticipated to implement its third consecutive rate cut in 2024, reducing the benchmark policy rate by 0.25% to a range of 4.25%-4.50%, marking a total drop of one percentage point since September [1] - The future of additional rate cuts is uncertain due to inflation exceeding the Fed's 2% target and stronger-than-expected economic growth complicating the central bank's decisions [1][2] Investment Strategy - In the current uncertain economic environment, value investing is highlighted as a strategic advantage, focusing on stocks trading below their intrinsic value for potential long-term gains [3] - The earnings yield metric is suggested as a useful tool for identifying attractively valued stocks, calculated as annual earnings per share divided by market price, with higher earnings yield indicating undervaluation [4][5] Stock Selection Criteria - A primary screening criterion for stock selection is an earnings yield greater than 10%, supplemented by estimated EPS growth for the next 12 months being greater than or equal to the S&P 500 [8] - Additional criteria include an average daily trading volume of at least 100,000 and a current price of $5 or more [9][10] Value Stock Recommendations - Pitney Bowes (PBI) is projected to have a 176% year-over-year earnings growth for 2025, with a Zacks Rank 1 and a Value Score of A [12] - Gulfport Energy Corporation (GPOR) is expected to see a 46% growth in 2025 earnings, also holding a Zacks Rank 1 and a Value Score of B [13] - Kingstone Companies, Inc. (KINS) anticipates an 11% growth in 2025 earnings, with a Zacks Rank 1 and a Value Score of B [14] - NCR Atleos Corporation (NATL) is projected to achieve a 15% growth in 2025 earnings, maintaining a Zacks Rank 1 and a Value Score of A [15] - Gilead Sciences (GILD) expects a 73% growth in 2025 earnings, currently holding a Zacks Rank 2 and a Value Score of B [16]

Core Insights - The article emphasizes the importance of disciplined risk management in investment strategies, advocating for a barbell approach that allocates 90% to safe assets and 10% to high-growth opportunities [1] DCF Model Assumptions - The valuation model assumes free cash flow will grow at a constant annual rate over the next eight years, with projected cash flows discounted back to present value using a fixed discount rate derived from the Capital Asset Pricing Model (CAPM) [1] - A terminal value is calculated by projecting free cash flow into the ninth year, assuming continued growth at the same rate, and applying a perpetual growth rate using the Gordon Growth Model [1] - Key assumptions include constant growth and discount rates, the discount rate exceeding the perpetual growth rate to ensure a finite terminal value, and accurate free cash flow projections reflecting future performance [1]

Core Viewpoint - Gilead Sciences, Inc. has received a positive recommendation from the CHMP for the approval of seladelpar for treating primary biliary cholangitis (PBC), which could significantly enhance its treatment portfolio in the EU [1][4]. Group 1: Drug Approval and Clinical Data - The CHMP recommended seladelpar for PBC treatment in combination with UDCA for adults with inadequate response to UDCA or as monotherapy for those intolerant to UDCA [1]. - The positive recommendation is based on the RESPONSE Study, which showed ALP normalization in 25% of participants at 12 months and a statistically significant reduction in pruritus compared to placebo [4]. - Seladelpar has been granted Priority Medicine designation in the EU, indicating its potential to address unmet medical needs [5]. Group 2: Market Impact and Financial Performance - Gilead's shares have increased by 14.3% year to date, contrasting with an 11.4% decline in the industry [3]. - The approval of seladelpar, branded as Livdelzi, strengthens Gilead's liver disease portfolio, which was bolstered by the acquisition of CymaBay Therapeutics for $4.3 billion [8]. Group 3: Strategic Initiatives and Collaborations - Gilead is actively seeking to enhance its pipeline through strategic acquisitions and collaborations, including a recent agreement with Tubulis for developing an antibody-drug conjugate [10][11]. - The company has also partnered with Merus to leverage its Triclonics platform for developing trispecific antibodies targeting tumor-associated antigens [12]. - Gilead's ongoing efforts to approve new drugs, including lenacapavir for HIV prevention, are expected to strengthen its market position amid increasing competition [14].

Gilead Sciences (GILD) could be a solid addition to your portfolio given its recent upgrade to a Zacks Rank #2 (Buy). This rating change essentially reflects an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.A company's changing earnings picture is at the core of the Zacks rating. The system tracks the Zacks Consensus Estimate -- the consensus measure of EPS estimates from the sell-side analysts covering the stock -- for the current and following years.Since a c ...

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional val ...