April 20, 2020
Gilead Sciences Shares Downgraded at BMO and Wells Fargo
Gilead Sciences shares were downgraded at BMO Capital and Well Fargo, which said the progress of the coronavirus drug, remdesivir, is reflected in the price.
(Which says all that needs to be said about the likelihood that Gilead has a miracle cure for COVID-19. - De)
by Dan Weil
TheStreet.com
Gilead Sciences (GILD) - Get Report shares on Monday fell after BMO Capital and Wells Fargo analysts downgraded the biotech giant, saying it is fully valued amid market enthusiasm for its drug candidate to treat COVID-19, remdesivir.
BMO Capital's Matthew Luchini lowered his rating to market perform from outperform and affirmed his price target at $79.
The stock’s 29% rally for 2020 through Friday stems from the optimism about remdesivir, he noted in a report cited by The Fly.
Luchini finds the latest anecdotal updates for the drug encouraging But the stock no longer shines on a risk/reward basis, "given continued uncertainty around the remdesivir commercial opportunity," he said.
So he is neutral on the shares "ahead of a better entry point."
Meanwhile, Wells Fargo analyst Jim Birchenough similarly downgraded the stock, to equal-weight from overweight. He, too, maintained his target price, at $87.
He said in a report that he’s still optimistic about remdesivir and sees it as an important part of a potential economic recovery, The Fly reports.
But the amount of revenue the drug will contribute to Gilead is unclear, as it initially will likely sell the medication at or below cost, Birchenough said. And the peak opportunity for remdesivir already is reflected in the stock price.
Gilead said last week that in a test of 53 patients suffering severe coronavirus symptoms, “the majority demonstrated clinical improvement and no new safety signals were identified with remdesivir treatment.”
At last check, Gilead shares traded at $83.66, down 0.4%. The S&P 500 was recently off 0.31%.
http://www.thestreet.com/investing/gilead-shares-downgraded-at-bmo-capital-and-wells-fargo?puc=yahoo&cm_ven=YAHOO&yptr=yahoo
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