Gilead Sciences, Inc. : A "V bottom" takes shape
Entry price | Target | Stop-loss | Potential |
---|
US$80.94 |
US$90 |
US$81.8 |
+11.19% |
---|
Gilead Sciences has strong fundamentals as shown by its Surperformance ratings. In facts, the company’s revenues are expected to nearly double this year, reaching 21.5 billion dollars. Moreover, sales are expected to steadily grow after that to finish at $30 billion by the end of 2017. Furthermore, net margin which should rise of 60% in 2014 is expected to stand over 51% at the close of the 2017 fiscal year. Proof, if necessary of the good dynamic of the business activity, analysts have constantly revised upward their estimates for both revenue and EPS. Most of all, the company seems undervalued compared to its peers with a P/E ratio at 14.1 times 2014 estimates EPS. To finish, the analysts’ consensus is strongly buyer with a great potential considering the average target price.
Graphically, the share followed a long term bullish trend. Recently, a strong rebound, after an also strong consolidation phase, drew a V bottom figure. This pattern which will be confirmed by crossing the USD 84 resistance level, indicate a continuation of the bullish trend ended at the end of February. Moreover, moving averages are well oriented on all time scales and support this idea.
Therefore, considering technical patterns and strong fundamentals on the company, a long position could be taken above USD 84, targeting USD 90. Nonetheless, a stop loss will be placed under USD 82 in case of failure of the bullish overflow.
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