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On Monday, Oppenheimer revised its outlook for Gilead Sciences (NASDAQ:) and revised its price target for the company's stock. The company lowered its target to $105 from $115 while maintaining its Outperform rating. This change follows Gilead Sciences' recent fourth quarter earnings report and investor update released last Monday.
Gilead Sciences, which trades on NASDAQ under the ticker NASDAQ:GILD, reported that fourth-quarter 2023 sales and profits did not meet expectations set by Oppenheimer. The slump in sales of HIV treatment drugs was particularly noticeable. Additionally, Gilead also faced setbacks in its drug pipeline, including the failure of the Phase 3 OAKTREE trial of oral oberdesivir to meet its primary endpoint and the cancellation of further development of its oncology asset magrolimab in hematologic cancers.
In response to these developments, Oppenheimer updated Gilead Sciences' financial model. This revision includes a slight decrease in projected HIV sales and the removal of magrolimab for hematologic indications. These changes influenced the decision to lower the target price.
Despite these adjustments, the company remains optimistic about Gilead's fiscal 2024 outlook. Based on the company's fiscal 2024 guidance and previous discussions with management regarding operating expense discipline, Oppenheimer expects the potential for revenue and earnings growth. The company's stance is supported by expectations that the impact of its coronavirus treatment drug Veklury on its income statement will be reduced, allowing it to improve its financial performance next year.
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