Gilead Sciences’ Picture Just Keeps Looking Better (GILD)

GILD just beat the Street, the stock is getting higher analyst targets, and the technical picture remains appealing

   
Gilead Sciences’ Picture Just Keeps Looking Better (GILD)

Gilead Sciences (GILD) — We last reported on Gilead Sciences on July 7, but recent developments encourage me to update our opinion on this biotechnology stock.

GILD has been a favorite biotech since Nov. 19, 2012, at $37.50. I have “headlined” it several times and at various prices since then. S&P Capital IQ reiterated a “strong buy” rating on GILD stock on March 28, increasing its price target to $116 from $104, then in late April again raised the target — that time to $130. S&P’s consensus earnings estimate was for $6.31 per share in 2014 and $7.85 in 2015.

However, yesterday Gilead reported second-quarter earnings of $2.36, trouncing S&P’s quarterly estimate of $1.18. Thus, S&P has increased its 2014 earnings estimate to $8.80, and has increased its 12-month price target on GILD $150.

In late May, Gilead became the victim of biotech profit-taking and pressure from the FDA to lower the price of its principle drug, Sovaldi. Now, however, only three states do not provide reimbursement for Sovaldi, down from seven. A bullish “V” was completed on July 2, and the resistance at just under $85 broke.

We are retaining our cup-and-handle trading target of $105. However, long-term investors could reap S&P’s new 12-month target of $150.

Buy GILD at the market.

072514 gild buy 300x194 Gilead Sciences Picture Just Keeps Looking Better (GILD)
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chart key Gilead Sciences Picture Just Keeps Looking Better (GILD)


Article printed from InvestorPlace Media, http://investorplace.com/2014/07/trade-of-the-day-gild-gilead-sciences/.

©2014 InvestorPlace Media, LLC

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