HSBC upgraded Gilead Sciences Inc. (NASDAQ:GILD) on Monday, citing that the consensus is ‘too pessimistic’ in its assumptions of continued decline once dolutegravir faces generics.
Analysts Rajesh Kumar and Dylan Whitfield upgraded the stock to Buy from Hold, and raised the price forecast to $155 from $133, citing the potential of long-acting HIV therapies, growth in HIV prevention, and multiple oncology catalysts to support.
HSBC wrote that consensus estimates assume a steeper decline in Gilead’s HIV franchise than is likely once dolutegravir loses exclusivity. Instead, long-acting HIV therapies could help improve patient adherence and offset much of the anticipated pressure on sales.
Long-Acting HIV Therapies Could Improve Adherence
According to the analyst, HIV treatment remains a unique market where better compliance can translate into stronger long-term demand.
Around 60% of patients are estimated to have suboptimal adherence, while more than 40% take fewer than 80% of their prescribed doses.
Long-acting treatment options already on the market, along with candidates in development, are expected to improve adherence. While the exact combinations and launch timelines remain uncertain, the analyst believes these therapies could support stronger-than-expected HIV revenue over time.
Oncology Pipeline And PrEP Business Add Upside
Beyond HIV, the analyst highlighted Gilead’s exposure to the fast-growing pre-exposure prophylaxis (PrEP) market through Yeztugo, which is expected to become a market leader.
The report also pointed to anitocabtagene autoleucel (anito-cel), a CAR T-cell therapy for relapsed or refractory multiple myeloma being co-developed by Arcellx Inc and Kite, a Gilead company.
Gilead acquired Arcellx for $115 per share in cash, along with a contingent value right of $5 per share, totaling an implied equity value of $7.8 billion.
The therapy is currently under FDA review, with a decision expected by December 2026. Although the initial launch is expected in fourth-line treatment, Gilead is pursuing a second-line indication.
The analyst added that expectations for anito-cel remain modest despite its favorable efficacy and safety profile, largely because of limited long-term data compared with competing therapies.
The report also noted that Gilead’s oncology business could gain momentum with Trodelvy expanding into first-line triple-negative breast cancer alongside or without Merck & Co. Inc.’s (NYSE:MRK) Keytruda, strengthening the company’s oncology portfolio.
Attractive Valuation Supports Upgrade
The analyst expects Gilead to deliver 5.8% revenue growth through the end of the decade, with additional upside possible as long-acting HIV therapies become less risky and gain broader adoption.
Trading at roughly 13 times next year’s expected earnings following its recent share-price decline, the analyst views the valuation as attractive, supporting the upgrade.
Stock Performance And Technical Analysis
Gilead stock is trading lower on Monday as the stock underperforms a soft Healthcare tape and drifts against a risk-on backdrop. The Nasdaq is up 1.21% while the S&P 500 has gained 0.71%.
Gilead is attempting to stabilize after recent weakness, but key technical hurdles remain.
The stock is trading 2.4% above its 20-day simple moving average, suggesting short-term support. However, it remains 0.3% below its 50-day SMA, 5.4% below its 100-day SMA and 0.7% below its 200-day SMA, indicating the longer-term trend is still under pressure.
A bearish death cross formed in July, with the 50-day SMA falling below the 200-day SMA. That pattern often signals continued intermediate-term weakness unless the stock reclaims those longer-term averages.
Momentum also remains mixed. The relative strength index stands at 53.15, indicating neither overbought nor oversold conditions.
The next resistance level sits near $137.50, while initial support is around $128.00, close to the 200-day exponential moving average.
Earnings And Analyst Outlook
The company’s next earnings report is expected on Aug. 6, 2026.
Wall Street expects a loss of $7.14 per share, compared with earnings of $2.01 per share a year earlier, while revenue is projected to increase to $7.40 billion from $7.08 billion.
Gilead trades at about 17.9 times earnings.
Analysts maintain a Buy consensus rating with an average price forecast of $161.23, according to data from 23 analysts. Recent rating actions include:
- Cantor Fitzgerald: Reiterated Overweight, maintained a $155 price forecast on July 6.
- HSBC: Upgraded the stock to Buy and raised its price forecast to $155 on July 6.
- Cantor Fitzgerald: Reiterated Overweight with a $155 price forecast on June 16.
GILD Stock Price Activity: Gilead Sciences shares were down 1.55% at $129.23 at the time of publication on Monday, according to Benzinga Pro data.
Photo by Sundry Photography via Shutterstock
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