Gilead raised to Buy at Bank of America on untapped potential
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Gilead (NASDAQ:GILD) traded higher pre-market Friday after Bank of America upgraded the antiviral drugmaker to Buy from Neutral, noting that investors havenât fully appreciated the companyâs expanding pipeline and accelerating growth.
The Foster City, California-based biotech recorded double-digit percentage growth during the early days of the pandemic as demand for its COVID-19 therapy, Veklury, surged. The FDA approved the antiviral as the first treatment against COVID-19 in October 2020.

However, the companyâs growth momentum sputtered as COVID-19 vaccines entered the market, hurting Veklury sales. Its topline remained flat in 2022 after an ~11% YoY growth in the prior year.

Despite declining Veklury sales and recent setbacks for blood cancer therapy magrolimab, Gilead (GILD) is executing well on its core HIV franchise and emerging portfolio in hematology/oncology, Bank of America argued.
In July, citing futility, GILD discontinued a Phase 3 study for immunotherapy, magrolimab, in higher-risk myelodysplastic syndromes.

"We think the shares look oversold," analyst Geoff Meacham and the team added, noting that GILD has underperformed this year, with its shares trading at 10x in terms of 2024 estimates compared to 16x for peers. 
Bank of America also raised its price target on Gilead (GILD) to $95 from $88 per share.


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