Assessing Gilead Sciences (GILD) Valuation After Mixed Near Term Returns And 9.4% Undervaluation Estimate

Why Gilead Sciences is on investors’ radar today

Gilead Sciences (GILD) has been drawing attention after recent share moves, with the stock closing at $118.30. Short term returns have been mixed, while longer term performance has been stronger.

See our latest analysis for Gilead Sciences.

The recent 1 day share price return of a 2.71% decline to US$118.30 and softer short term moves contrast with a 1 year total shareholder return of 34.18%. This suggests momentum has cooled after a strong run.

If Gilead has you rethinking your healthcare exposure, this could be a good moment to scan other pharma stocks with solid dividends that might fit a similar long term income and defensiveness theme.

With Gilead posting a 34.18% 1 year total shareholder return, trading at US$118.30 and sitting at an 11.90% discount to analyst targets plus an indicated intrinsic discount, is there still value here, or is the market already pricing in future growth?

Most Popular Narrative: 9.4% Undervalued

With Gilead Sciences last closing at US$118.30 and the narrative fair value sitting at US$130.63, the current gap is drawing attention to the assumptions behind that upside.

The launch and scaling of innovative products (Yeztugo, Trodelvy first-line, Livdelzi) position Gilead to deliver a more favorable product mix and premium pricing, driving higher gross margins and improving long-term earnings trajectory as portfolio diversification reduces overexposure to legacy products.

Read the complete narrative.

Curious how a modest growth outlook, higher long run margins and a premium future P/E all combine into that fair value number? The narrative blends specific revenue and earnings paths with a discount rate just under 7% to back into its target range. If you want to see exactly which profit and valuation assumptions are doing the heavy lifting, the full narrative lays it out in detail.

Result: Fair Value of $130.63 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this story can shift quickly if policy driven drug price reforms bite harder than expected, or if key HIV and oncology launches struggle to gain traction.

Find out about the key risks to this Gilead Sciences narrative.

Build Your Own Gilead Sciences Narrative

If you see the data differently, or prefer to test your own assumptions, you can build a custom Gilead view in minutes: Do it your way.

A great starting point for your Gilead Sciences research is our analysis highlighting 5 key rewards and 1 important warning sign that could impact your investment decision.

Looking for more investment ideas?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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