GILD - Embedded Expectations Analysis - 2019 05 10
Gilead Sciences Inc. (GILD:USA) trades well below corporate averages relative toUAFRS-based (Uniform) Earnings, with an 8.9x Uniform P/E. At these levels, the market is pricing in bearish expectations for the firm, but management is confident about market share, their ability to handle competitive pressures, and their approach to M&A.
Specifically, management is confident in their expanding portfolio of products and the market share gains of their Descovy-based regiments. Moreover, they are confident in their ability to handle competitive pressure and pricing pressure, and the per share impact of their favorable tax settlement. Lastly, they are confident about their prudent approach to their M&A activity.
Tailwinds related to market share and M&A, and management's confidence in their ability to handle competitive pressures suggest market expectations are far too bearish, and upside is warranted going forward.
Gilead Sciences is a research-based biopharmaceutical company that discovers, develops and commercializes medicines. The company's primary areas of focus include viral diseases, inflammatory and fibrotic diseases and oncology. The company's products include: Biktarvy for the treatment of HIV-1 infection in certain patients; Vosevi?, a single tablet regimen of sofosbuvir, velpatasvir and voxilaprevir for the re-treatment of chronic hepatitis C virus infection in adults; Vemlidy? for the treatment of chronic hepatitis B virus infection in adults with compensated liver disease; and Yescarta (axicabtagene ciloleucel) for the treatment of adult patients with relapsed or refractory large B-cell lymphoma.
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