Gilead Sciences(GILD:NSD) Morgan Stanley Upgrades Gilead on Covid prospects

STA Research
by: STA Research

Morgan Stanley today raised their target on Gilead Sciences to $80, from $77.  The firm has maintained their Equal weight rating on the stock.  Morgan Stanley’s last target upgrade for Gilead was on May 1st, when the analyst raised their target to $77 from 75. Morgan Stanley’s recent target increase is coming on the back of renewed positive sentiment over the effectiveness of their coronavirus drug to possibly reduce the risk of death by over 60 percent.

STA Research(stocktargetadvisor) has a average target on the stock of $80, and a consensus Buy rating. STA’s  view of the stock is Slightly Bearish with a score of 4 out of 10, where 0 is very bearish and 10 very bullish.

 

What to like:
Low volatility
The stock’s annual returns have been stable and consistent compared to its sector peers(for a hold period of at least 12 months) and is in the top quartile. Although
stability is good, also keep in mind it can limit returns.
Positive cash flow
The company had positive total cash flow in the most recent four quarters.
Positive free cash flow
The company had positive total free cash flow in the most recent four quarters.
Superior Dividend Growth
This stock has shown top quartile dividend growth in the previous 5 years compared to its sector

 

What to not like:
Poor risk adjusted returns
This company is delivering below median risk adjusted returns in its peers. Even if it is outperforming on returns , the returns are unpredictable. Proceed with caution.
Below median dividend returns
The company’s average income yield over the past 5 years has been low compared to its peers. However, it is not a problem if you are not looking for income.
Highly leveraged
The company is in the bottom half compared to its sector peers on debt to equity and is highly leveraged. However, do check the news and look at its sector and management statements. Sometimes this is high because the company is trying to grow aggressively.
Overpriced on free cash flow basis
The stock is trading high compared to its peers on a price to free cash flow basis. It is priced above the median for its sectors. Proceed with caution if you are considering to buy.
Low Earnings Growth
This stock has shown below median earnings growth in the previous 5 years compared to its sector
Low Revenue Growth
This stock has shown below median revenue growth in the previous 5 years compared to its sector

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