Gilead Sciences, Inc. (GILD) — I have been covering GILD stock since November 2012, when it was trading near $37 (split adjusted). My latest recommendation was on Feb. 24, with shares just under $105, with a trading target of $117. That objective was hit last week, with GILD stock making a new all-time high of $117.90 on Thursday, and it remains my favorite biotechnology stock.
Earlier this year, the company initiated a quarterly dividend of $0.43 per share, as well as a five-year, $15 billion share buyback program.
S&P Capital IQ lauds Gilead’s superior management and research, and its progress in decreasing its reliance on its HIV franchise. Thanks primarily to the success of Gilead’s hepatitis C drugs, Sovaldi and Harvoni, its analysts expect revenue growth of 17.3% in 2015, while earnings are expected to increase nearly 40% to $10.20 per share. They project gross margins of 90% and operating margins of 71.2% for the year.
Capital IQ rates GILD stock a “strong buy.” Its 12-month price target of $143 is 14 times the 2015 earnings estimate, which is conservative in the biotech sector.
After a run from under $65 in April 2014 to just under $117 in October, GILD stock consolidated in a rough saucer formation. It broke from that consolidation last week. A new golden cross was triggered after steady accumulation appears to have overcome profit-taking.
On Thursday, GILD stock broke from a huge double-top with a trading objective of $125 and a long-term objective of $150. Both traders and investors should buy shares at the market for short- and long-term gains, as well as the newly established dividend.
