Gilead Sciences’ stock surged more than 8% on Friday, as its latest earnings drew the consensus from Wall Street that the company’s HIV franchise is not only holding firm but expanding, with its new prevention drug Yeztugo poised to be a catalyst for future growth.
Analysts from leading firms upgraded their price targets and reiterated bullish calls after the biopharmaceutical company posted steady second-quarter results and raised its 2025 guidance.
The stock surged more than 8% on Friday, extending gains after Gilead reported adjusted earnings per share of $2.01, slightly ahead of the $1.97 expected by analysts, according to LSEG.
Revenue rose 2% year-over-year to $7.1 billion, matching market forecasts.
Street applauds clean beat and raise
BMO Capital Markets described the quarter as “a breath of fresh air with a clean beat and raise,” noting the HIV business was “firing on all cylinders.”
The firm maintained its ‘Outperform’ rating and $130 price target.
Morgan Stanley went further, lifting its target to $143 from $135 while keeping an Overweight rating, citing “strong performance in the HIV segment” and the promising trajectory of Yeztugo.
J.P. Morgan (‘Overweight’, PT: $135) highlighted the company’s “confident” commentary on the launch, suggesting encouraging early adoption trends.
Bernstein (‘Outperform’, PT: $120) called the US PrEP market “ripe” for Yeztugo’s success, while Oppenheimer (‘Outperform’, PT: $128) pointed to the timing of the launch coinciding with a favourable US Supreme Court ruling that requires health insurers to cover certain recommended preventive services at no cost.
Twice-yearly PrEP drug seen as competitive edge
Yeztugo, approved by US regulators in June, is the first long-acting injectable for HIV prevention administered just twice a year.
Analysts say it addresses longstanding barriers to daily oral PrEP, such as adherence issues, stigma, and limited healthcare access.
CEO Daniel O’Day told Reuters that the drug’s rollout began almost immediately after approval.
“The first scrip was written within hours … the first dose was delivered within days,” he said, adding Gilead is on track to achieve its stated goal of 75% US insurer coverage of the twice-yearly injection within six months and 90% coverage within a year.
Total HIV product sales rose 7% year-over-year to $5.1 billion in the quarter, a figure analysts believe underscores the segment’s resilience despite generic competition for older products like Truvada.
Guidance upgrade fuels optimism
Gilead now expects full-year adjusted earnings of $7.95 to $8.25 per share, up from $7.70 to $8.10, and raised its 2025 product sales outlook to between $28.3 billion and $28.7 billion.
Chief Financial Officer Andrew Dickinson credited “strong HIV sales and continued expense discipline” for the upgrade.
Analysts at Zacks said, “It has been an eventful year for GILD so far. The recent FDA approval of lenacapavir under the brand name Yeztugo solidifies GILD’s HIV portfolio as its other prevention drug, Truvada, faces generic competition.”
While competitive pressures remain — and Gilead’s cell therapy business continues to face headwinds — the consensus view is that the company’s strengthened HIV franchise and disciplined execution have positioned it to navigate industry challenges and capture meaningful growth in the years ahead.
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