GILD
Gilead Sciences, Inc.
$145.14
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 52.9% above fair value
You pay
$145.14
Bear
$81.36
Fair
$94.92
Bull
$108.48
Bear
$81.36
-43.9%
$6.78 × 12x P/E
Fair
$94.92
-34.6%
$6.78 × 14x P/E
Bull
$108.48
-25.3%
$6.78 × 16x P/E
Adjust Assumptions
14.0x
6.78$
Key Value Driver
Normalized P/E multiple (14x base case)
Implied Market Multiple
21.4x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (58 analysts)
$151.14
Divergence from AlphaVal
37%
Summary
Applying a 14x P/E to adjusted EPS of $6.78, the base-case value is $94.92 per share. DDM cross-check: $58.38.
Warnings
Dividend-based valuation: $58.38 (below our primary estimate by 38%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $151.14 (from 58 analysts). Our estimate is 37% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples