Hello my dears,
In the Novo hype that has broken out, a cheap share that increases the good dividend and still has the chance to perform is being completely overlooked.
In contrast to Novo, it also delivered on the figures.
Some analysts are recommending a buy today and have raised their price targets.
The US biotech company Gilead Sciences presented strong figures on Thursday evening. The share offers investors an attractive overall package.
This quarterly season is particularly selective for biotech stocks
In the biotechnology and pharmaceutical sector, the wheat is being separated from the chaff in the current reporting season. While companies such as Bayer and Eli Lilly failed to impress, groups such as Halozyme and Amgen reported strong business.
On Thursday evening, another company, Gilead Sciences, known primarily for its HIV drugs, presented satisfactory figures.
Figures above expectations, net profit up significantly
Compared to the same quarter of the previous year, sales climbed by 1.9 percent to 7.08 billion US dollars. This exceeded expectations by 120 million US dollars; experts had expected zero growth.
Adjusted earnings per share of USD 2.01 were also above expectations and exceeded them by 5 cents. However, Gilead Sciences (Gilead Sciences shares) did not achieve an improvement compared to the same quarter of the previous year - net profit did.
This climbed by 21.7 percent from a total of 1.61 billion US dollars to 1.96 billion US dollars. The company reported an operating cash flow of 827 million US dollars, with free cash flow of 720 million US dollars. This was used to finance the dividend of 994 million US dollars and share buybacks worth 527 million US dollars.
Outlook raised, higher profit expected
Gilead Sciences has raised its outlook for the current financial year, citing the high demand for its HIV therapies. The forecast range for adjusted earnings per share has been raised from 7.70 to 8.10 US dollars to 7.95 to 8.25 US dollars. The sales forecast was raised by USD 100 million to USD 28.3 to 28.7 billion.
Quarterly report could provide tailwind for breakout
Figures above expectations, an increase in net profit and a confident outlook - this was well received on the US after-hours market, where the shares traded with a premium of 3.4 percent.
If these gains hold up before the weekend, Gilead Sciences has the opportunity to put the stagnation of the past weeks and months behind it and break out above the resistance level of USD 117.60.
Conclusion: Attractively valued overall package
In addition to the satisfactory business development, the moderate valuation of the share also provides support for this. Based on the company's own estimate, Gilead Sciences is valued at a price/earnings ratio of 14.1. This is a significant discount to the industry average of 16.7.
The valuation is also significantly below the comparative values for other key figures. Above all, the profit growth with a PEG of 0.65 and the cash flow with a KCV of 11.9 are currently favorable. In addition, the company offers a dividend yield of around 2.8%. This makes the share a promising overall package for investors.
Author: ARIVA.DE Editorial team/mg
