Or not. Looks like it is set up for a 10+ point swing either way. We longs better hope for both great #s and more importantly, a big increase in 2015 revenue guidance.
There are lots of possible, positive catalysts that could drive the price up overnight to $130 but the market is very focused on 2017 and thereafter. Earning should handily beat consensus but it's possible that the market will not respond to good earnings and the stock price continues to be range bound. The biggest risk is an unlikely earnings miss. This would send the stock price to below $90 where it will sit until 2017 and thereafter revenue becomes more predictable. I see this as very low risk (5% probability); BUT, the Market is never rational or predictable.
Actually, since it takes a day to settle today is the last day to balance portfolios for the quarter. Tomorrow should be an up day.
Mutual funds report holdings on the last day of the quarter (Tomorrow) Since most funds have been significantly over weight in GILD they need to reduce holdings to report a properly balanced portfolio. This selling will end by tomorrow. From then on, there will be significant accumulation the take advantage of the inevitable price surge when 1st Q EPS blow out estimates.
I guess they don't consider record 1st Q earnings a catalyst.
Sounds like a reasonable approach. At $79.8 I'll mortgage the house to buy it. Of course, the only reason it could possibly go that low if for the fundamentals to drastically change for the worse. If that happens I doubt that anyone would want it, even at that price.
Blank out periods are self imposed in order to prevent trading on inside information. Also, the purchases must nor be done in such a way to impact the price movement. The periods vary from company .For example, a company can buy X$ every Tuesday at the opening, including the day earnings are announced, as long as the plan was put in place before this info was known to management and not varied afterwards. The company has the burden of convincing the SEC that purchases are not based upon inside info or done in such a way as to manipulate price.
The impact of the buyback on the stock price has been grossly misinterpreted by this message board. 10 million shares at $100 per share is over a Billion $ traded each day. GILD's 15 Billion allocation over 5 years is just a drop in the bucket. Long term it will increase EPS. Short term it has no impact. The large blocks being traded are by hedge funds, mutual funds and other large investors.
I'm not sure what the basis is for their low -single-digit top line growth near term and flat sales from 2018 to 2022.. Are they assuming most patients will be cured, insurance will stop paying, competition, etc? Morningstar is not the only ones thinking this, but these assumptions are no more than unfounded speculation at this point. From weekly scripts to earlier than expected world wide sales penetration, all indications are for a 1st Q 2015 EPS over $2.50 and growing by at least 10 - 20% quarterly thereafter for the foreseeable future.
Even if you don't think it possible, one needs to contemplate what will the market reaction will be to a $2.50+ 1st Q?
With only 5% per Q increases 2015 would be $10.76. (2.50 + 2.62 + 2.75 +2.89). With a price target of 114 Morningstar gives it a multiple of 10.6. That really is a multiple for a stagnant company, not a company with 18 other drugs, a substantial pipeline and a pile of cash. If the market gave it the 16 multiple this stock deserves the price would be $172. A 13 multiple which is now where near unrealistic would put it at $140. I just can't see $114 being the price after earnings are known.
Your missing a lot. There are several earnings projections in comments to various SA articles. On current TRx tract 1Q EPS will exceed $2.60.
Out of curiosity Carolyn, in your opinion at what price do you believe GILD should be, given the fundamentals; or, do you thing the company is totally worthless?
It should happen with 1st Q earnings, but at this point I can see it going down further with a $2.65 Q - which the weekly NRxs are trending to. I just don't understand the lack of market interest in this stock.
With weekly report of NRx through 2/27 there is no way 1st Q EPS will be less than $2.65. The big question is, how will the market react? I expect not very well. There will be a lot of unfounded speculation that it can't continue. thus an 11 multiple forever.