Ahh yea..GILD does 3B in profit a year now..how do you think they bought Pharmassettttttt ???? Add HepC numbers into it....and YEA!! $4.8B in net income is on the low side of estimates..GO GILD!!! Oh yea guys..have you factored in Oncology yet ???? :)))
"...GILD does 3B in profit a year now.. Add HepC numbers into it and YEA!! $4.8B in net income is on the low side of estimates"
This doesn't address my original question: Is it already priced into the stock?
You predict $4.8 million annual net income. Okay, assume that happens sometime in the future. Apply a forward P/E ratio of 20, and you get a market cap of $96 billion. Compare that to the current market cap of $92 billion (i.e., $55.63/share x 1.66 billion shares outstanding), and I have to ask if the HepC potential isn't already priced into the stock.
Sort of related thoughts from Seeking Alpha on GILD future...
Putting a price on sofosbuvir and Gilead
If you assume that Gilead's single pill HIV patent cliff strategy works, and then simply add the $6.42 billion analyst estimate of sofosbuvir sales to Gilead's current TTM revenues of $9.95 billion, you arrive at a total revenue of $16.37 billion in 2017.
Over the past five years Gilead has maintained a quarterly profit margin between 20-40%. If you apply a 30% profit margin to the total revenue figure of $16.37 billion mentioned above, you arrive at a net income figure of $4.91 billion.
The average number of outstanding shares recorded in Q1 2013 was 760 million. Assuming Gilead doesn't dilute or repurchase shares, you arrive at earnings of $6.46 per share. At Gilead's recent price of about $55, that's a PE multiple of about 8.51 times 2017 earnings.
If you apply a reasonable PE multiple of 20 to the projected earnings figure of $6.46 above, that's a share price of $170.23. That would be a total increase of 209.5% in five years, or a compound annual growth rate of 25.4%.
Yeah, well there's only one problem with that Seeking Apha article. That author has head up his wazzooo if he thinks the sharecount is only 760 million. Try 1.66 billion!!! He forgot that the stock had a 2 for 1 stock split back in January. So you can cut his 5-year price target in half. Or $85/share in 5 years.
I would like to know. The range of possibilities - both on the upside as well as the downside. More specifically, what exactly are we looking for at ASCO that would be enough to surprise the market for a 5-10% pop/drop?