Gilead Wins Price-Target Boosts After Solid Q4, Retail Brushes Off Medicare Reform Hit To HIV Drugs

Investors seem encouraged by the company's strong performance in its core business areas and the promise of further growth driven by its expanding pipeline.

Shares of Gilead Sciences Inc. surged over 4% in premarket trading on Wednesday following a solid fourth-quarter earnings report, with multiple analysts raising their price targets. 

Morgan Stanley raised its price target to $123 from $113, maintaining an 'Overweight' rating, citing the potential for upward estimate revisions and further multiple expansion as the company advances its next-generation HIV pipeline. 

Wells Fargo also increased its target to $120 from $105, highlighting Gilead's resilience in its 2025 guidance despite headwinds from Medicare reforms and foreign exchange impacts. 

Piper Sandler raised its target to $110 from $105, retaining its 'Overweight' rating, while Baird bumped its target to $100 from $95 but kept a 'Neutral' outlook.

The retail sentiment on Stocktwits was overwhelmingly positive, with a nearly 1,900% jump in message volume on Tuesday when Gilead released Q4 earnings. 

Many retail traders expressed optimism, with one user predicting the stock would head to $120, where it "belongs," and another hoping for an all-time high breakout soon.

Gilead's fourth-quarter revenue came in at $7.6 billion, surpassing the consensus of $7.2 billion. Adjusted earnings per share (EPS) were $1.90, above the estimate of $1.74. 

For 2025, the company provided sales guidance between $28.2 billion and $28.6 billion, roughly aligning with expectations, and projected non-adjusted EPS between $7.70 and $8.10, ahead of the consensus of $7.61.

CFO Andrew Dickinson attributed the earnings beat to strong demand-led volume growth across key segments such as HIV, oncology, and liver disease. 

However, he acknowledged that changes to Medicare's prescription drug plan, which include a $2,000 out-of-pocket spending cap, would cost Gilead $1.1 billion in lost revenue in 2025, which could weigh on the growth of its HIV business. 

The company's stock is up nearly 31% over the past year and is currently trading around 5% below the average Wall Street price target of $101.24.

Gilead's stock hit an intraday high of $122.40 in 2015 and has since dropped more than 21% from that level. 

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