J.P. Morgan Sees Upside For Gilead Sciences (GILD)

J.P. Morgan analysts Geoffrey Meacham, Terrance P Coyne, G Krishna Gorti and Michael E Ulz maintained their Overweight rating for shares of Gilead Sciences, Inc (Nasdaq: GILD), with a price target of $55 per share.

The analysts said they still like the stock, which is valued at a near worst-case scenario, without taking into account any of the possible upside drivers.

The J.P. Morgan analysts wrote, "we see the fundamentals of Gilead’s core HIV franchise as quite strong for the foreseeable future, which warrants a premium to the large cap biotech peer group. Our December 2010 price target of $55 is based on our proprietary P/E multiple analyses that factors in relative pipeline strength and relative earnings growth CAGRs, which suggests a P/E of about 15x on our 2010 EPS estimate of $3.64. Our pipeline analysis suggests Gilead’s pipeline has the biggest opportunity on an absolute dollar basis, which includes several potential “call options” outside HIV. For additional details on our price target methodology, please see our 2010 Global Biotech Outlook published Jan 5, 2010."