GILD
The market was bracing for a gloom-fest
HSBC basically walked into the room and said: relax, the doom scenario is a little dramatic. The firm upgraded Gilead Sciences to Buy from Hold and lifted its price target to $155 from $133, saying Wall Street is too pessimistic about how hard the HIV franchise will fall once dolutegravir goes generic.
Why that matters
This is the classic “yes, there’s a cliff, but maybe not a cartoon one” setup. HSBC thinks long-acting HIV therapies could help Gilead keep patients sticky, because adherence is half the battle in this market. If fewer pills means fewer missed doses, that’s not just a medical win — it’s a revenue cushion.
The bank also sees upside from:
- PrEP growth, especially Gilead’s Yeztugo
- Oncology momentum, including Trodelvy
- Anito-cel, Gilead’s CAR-T asset under FDA review
The bigger story
This isn’t just about HIV anymore. Investors have been treating Gilead like an old-school cash machine with one main engine, but HSBC’s argument is that the company has a bunch of side quests that could turn into real chapters. That matters when the stock is trading around 13x next year’s earnings and still below several of its long-term moving averages.
Merck gets a cameo in the story because Gilead’s Trodelvy is expanding into first-line triple-negative breast cancer with or without Keytruda. Cute cameo, sure — but the real plot is whether Gilead can prove it’s more than its legacy HIV business.
Big picture: if HSBC is right, the market may be pricing in a worse decline than Gilead actually deserves. And when expectations are that low, even a solid shrug can look like a glow-up.