Gilead Sciences (GILD) — This has been a favorite biotech stock of mine since Nov. 19, 2012, when I recommended it near $37.50. On Aug. 29, at just over $60, I reiterated my positive opinion, citing an increase in earnings estimates by S&P.
On Nov. 20, Citigroup (C) reiterated its “buy” rating on GILD, increasing its earnings estimate for fiscal 2014 by a nickel to $3.46, and upping its price target to $87 from $85.
In December, S&P repeated its “strong buy” rating and $94 price target following a sell-off it attributed to an unconfirmed Bloomberg report that Express Scripts (ESRX) raised concerns over the price of Gilead’s recently approved hepatitis C drug, Sovaldi. Recently, S&P raised its earnings expectations to $1.89 per share for 2013 and $3.10 for 2014. It also raised its 12-month target price to $104.
Technically, GILD is still in a powerful bull channel with support at its 50-day moving average at $72. Resistance at $76 has been stubborn, but buying volume is eating into the overhead, and it is only a matter of time before GILD breaks to new highs. MACD is moving up from the bearish zone, predicting that a breakout is forthcoming.
Buy GILD at the market for a trade to $85. My 12-month target is $100.