GILD
Gilead Sciences, Inc.
$131.40
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Overvalued
Trading 1.9% above fair value
You pay
$131.40
Bear
$110.51
Fair
$128.92
Bull
$147.34
Bear
$110.51
-15.9%
$7.97 × 12x P/E
Fair
$128.92
-1.9%
$7.97 × 14x P/E
Bull
$147.34
+12.1%
$7.97 × 16x P/E
Key Value Driver
Normalized P/E multiple (14x base case)
Implied Market Multiple
16.5x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $161.18 from 58 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $128.92 per share.
Warnings
Dividend-based valuation: $57.33 (below our primary estimate by 49%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $161.18 (from 58 analysts). Our estimate is 31% 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