Why Gilead Sciences Stock Is Jumping Today
What happened
Shares of Gilead Sciences (NASDAQ: GILD) were jumping 6.7% higher as of 11:21 a.m. EST on Tuesday. The gain came after Morgan Stanley analyst Matthew Harrison upgraded the stock to overweight from equal weight. Harrison set a one-year price target for Gilead of $83, reflecting a premium of 31% above the closing price on Friday. In addition, the U.S. Supreme Court declined to review Merck's (NYSE: MRK) appeal of a lower federal court's decision to overturn a $2.54 billion verdict against Gilead for infringing patients with its hepatitis C drugs Harvoni and Sovaldi.
So what
The bigger catalyst for Gilead today was definitely Morgan Stanley's upgrade. It wasn't all that surprising that the Supreme Court opted not to take on Merck's case. But it was at least a little surprising that Matthew Harrison expects the biotech stock to soar to $83.
Image source: Getty Images.
Harrison is certainly more bullish than most Wall Street investors. The average price target for Gilead is a little over $72, which still reflects a double-digit upside compared to the stock's closing price at the end of last week.
Gilead could meet Harrison's optimistic outlook. However, it won't be easy. COVID-19 therapy Veklury ranked as the company's primary revenue growth driver in the third quarter. Sales growth will likely be harder to come by later this year as more people across the world receive COVID-19 vaccines.
Now what
In just a few weeks, Gilead will announce its fourth-quarter results. Veklury will likely again be the big story. Going forward, though, the biotech's big investments in oncology will need to pay off for Gilead to return to its winning ways of several years ago.
10 stocks we like better than Gilead Sciences
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Gilead Sciences wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of November 20, 2020
Keith Speights has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Gilead Sciences. The Motley Fool has a disclosure policy.
