Gilead Sciences Headed for New Highs

by Sam Collins | February 12, 2013 1:21 am

Gilead Sciences Headed for New Highs

Gilead Sciences (NASDAQ:GILD[1]) — This large-cap biotech is well-positioned to gain market share. On Nov. 19, at $74 (split $37), the Trade of the Day[2] said, “In September, the stock rallied to new highs after rival Bristol-Myers Squibb (NYSE:BMY[3]) suspended its trial of a competing hepatitis C treatment. And last week, the stock gapped up to a new all-time high resulting from positive results from a study for its hepatitis C treatment.”

Since the important announcement of the positive Hepatitis C treatment in November, analysts have increased their estimates. (All estimates and prices have been adjusted for a 2-for-1 split that occurred on Jan. 28.) Since then, operating margins are estimated at 46.3% in 2013 and 50.6% in 2014. New adjusted consensus estimated earnings per share (EPS) are $2.04 for 2012 and $2.76 for 2013, and the mean 12-month price target is $47, based on an expected price/earnings ratio (P/E) of 18.5.

Technically, the stock is in an orderly bull market characterized by breakouts and breakaway gaps. Strong support exists at its 50-day moving average and bullish support line, both at $38.25.

Each breakout has resulted in a new high followed by a short-term consolidation. Buy under $40 for a trading target of $48. Longer-term buyers could see much higher prices.

02 12 13 gild 300x204 Gilead Sciences Headed for New Highs
Click to Enlarge

chart key 300x84 Gilead Sciences Headed for New Highs

Endnotes:
  1. GILD: http://studio-5.financialcontent.com/investplace/quote?Symbol=GILD
  2. Trade of the Day: http://investorplace.com/2012/11/trade-of-the-day-gilead-sciences-nasdaq-gild/
  3. BMY: http://studio-5.financialcontent.com/investplace/quote?Symbol=BMY

Source URL: http://investorplace.com/2013/02/trade-of-the-day-gilead-sciences-nasdaq-gild-2/
Short URL: http://invstplc.com/1foATyj