Gilead Sciences: Bright Profit Outlook

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  Christian Ingerl
  Redaktor

Whether share performance or earnings development, the “Magnificent 7” have been the measure of all things for many quarters in a row. However, while the highly praised seven have recently gone into reverse gear on the stock market, a number of these companies still made the most important contribution to the S&P 500’s earnings growth. However, a change seems to be in the offing here too. The top five contributors to the S&P 500’s annual earnings growth for the first quarter are expected to be Bristol Myers Squibb, NVIDIA, Gilead Sciences, Amazon and Broadcom will be. This means that only two companies from the M7 would be among the five most important contributors.

Trend reversal

Overall, the “Magnificent Seven” are expected to increase their profits by an average of 14.8 % in the first quarter compared to the previous year. Gilead Sciences, on the other hand, will see a much steeper increase. While a loss of USD 1.32 per share was recorded in the previous year, a profit of USD 1.77 is now expected. The positive trend is expected to continue over the course of the year. The consensus forecast for 2025 is earnings per share of USD 7.94, compared with just USD 0.38 in the previous year.

The biotech company recently celebrated operational successes with its HIV treatment portfolio. At the Conference on Retroviruses and Opportunistic Infections (CROI) 2025, the company presented positive data on a Phase III study on the efficacy of “Biktarvy” in the treatment of HIV and HBV co-infection as well as a Phase II study on a long-acting treatment regimen from the first clinical HIV cure study in South Africa. These are important successes, as HIV treatments account for a significant proportion of Gilead’s sales. Last year, the Group generated around USD 19.6 billion from the sale of its HIV drugs, which corresponded to around 68% of total revenues.

New growth driver

Growth could also be driven by the new drug “Lenacapavir”, which is due to be launched on the market this summer. According to experts, the drug could become a significant source of revenue as it is positioned as the first six-monthly injection for HIV prevention. Analysts expect coverage of the drug to increase from 2026, which could give Gilead an advantage in the highly competitive HIV market. While concerns have recently emerged that the US Department of Health and Human Services could reduce federal funding for HIV prevention efforts, this is unlikely to affect Gilead. The company has pointed out that the pre-exposure prophylaxis (PrEP) business is predominantly commercial and around 80% of it does not rely on government funding. The analysts at Citi therefore expect the majority of PrEP revenues to remain stable and recommend buying the stock with a price target of USD 125. This corresponds to an upside potential of around one fifth.

Summit in view

The Gilead share is currently on a consolidation course. However, after a doubling in price between June 2024 and March 2025, this is not an unusual development. The setback was absorbed by the psychologically important USD 100 mark, which is also the level of the 100-day moving average. Since then, the share price has moved in a narrow range between USD 104 and 108. The upcoming figures for the first quarter could now provide the necessary impetus for the share to make its way back towards its multi-year high of USD 119.96. Just above this, at USD 123.37, is the all-time high from June 2015.

Investment solutions

If you would like to bet on a chase to the summit following the presentation of the figures for the first quarter, you can consider various leveraged securities. With the long factor certificate FL4GIV from Bank Vontobel can be used to bet on a short-term upward movement with a constant multiplier of 4. The mini future is also suitable for short to medium-term upward speculation LGXWJB from Julius Baer. The leverage is 3.7 and the knock-out is 24% away from the current level. If you want to bet that Gilead will be trading above its previous high in around a year’s time, take a look at the call warrant GIYCJB. The strike of the security is USD 130, the leverage is 7.3 and the term ends on March 20, 2026.

However, a high return is also possible with a sideways product. The Barrier Reverse Convertible FAABJB from Julius Baer offers the prospect of a return of 18% until June 2026. This profit is hedged downwards with a risk buffer of around one third. The barrier is located at USD 69.62.