November 13, 2017

GILD – While management’s concerns about competitive headwinds and their guidance imply near-term equity upside may be limited, overly bearish market expectations support longer-term upside


  • Gilead Sciences Inc. (GILD:USA) currently trades near historical lows relative to UAFRS-based (Uniform) Earnings, with an 8.1x Uniform P/E, implying bearish expectations for the firm. As such, while management’s concerns about competitive headwinds and their guidance imply near-term equity upside may be limited, these overly bearish market expectations support longer-term upside
  • Specifically, while market expectations are for Uniform ROA to fall to historical lows, management is optimistic about growth opportunities in the Chinese market. In addition to overly bearish expectations, this implies that, despite management’s concerns about the potential for other near-term headwinds, longer-term equity upside remains justified

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