Why Gilead Sciences Stock Just Popped

Core Viewpoint - Gilead Sciences stock is recommended as a "buy" with a price target of $133, reflecting optimism about its new HIV-1 prevention medication, Yeztugo [1][4]. Market Potential - The market for pre-exposure prophylaxis against HIV is projected to grow by 49% over the next five years, with Yeztugo expected to capture a 38% market share according to physician surveys [3]. Analyst Insights - Most analysts currently do not incorporate Yeztugo's anticipated market share gains into their valuations of Gilead, which presents a potential investment opportunity as Yeztugo is expected to significantly contribute to sales growth [4]. Financial Metrics - Gilead is valued at over $141 billion, trading at 23.5 times trailing earnings, excluding growth from Yeztugo [5]. - Analysts forecast a nearly 23% annual profit growth for Gilead over the next five years, alongside a 2.8% dividend yield, indicating a favorable growth-to-price ratio [6]. Cash Flow Analysis - Gilead generates approximately $9.8 billion in free cash flow over the last 12 months, resulting in a price-to-free-cash-flow ratio below 15, suggesting strong financial health [6]. Investment Outlook - Without considering Yeztugo, Gilead stock is already viewed as a good investment, and with the potential growth from Yeztugo, it could be seen as a highly attractive opportunity [7].