Gilead Sciences (GILD) reported first-quarter earnings per share of 55 cents. The company also plans a note offering and stock buyback. Prudential upgraded the stock.
Analyst Ron Ellis says he is upgrading Gilead Sciences to neutral from underweight. He notes Gilead posted 59 cents non-GAAP first-quarter EPS, vs. his 54 cents and consensus 52 cents estimates. First-quarter revenues also beat estimates.
Ellis ties the upside to strong sales in its HIV franchise and Tamiflu royalties. He also notes the company updated 2006 guidance, raising HIV franchise guidance to revenues of $1.825-$1.875 billion from $1.675-$1.75 billion, and Hepsera guidance to $205-$215 million from $200-$210 million. Furthermore, the company raised expense guidance for R&D and selling, general, and administrative expenses.
He ups $1.94 2006 non-GAAP EPS estimate to $2.36, and $2.25 for 2007 to $2.50. He raised his $63 price target to $71.