BMO Capital Markets says Gilead Sciences is a “best-in-class” therapy franchise that could soon see multiple expansion. “Simply put, Gilead has the best cell therapy manufacturing capabilities vs. competition from Novartis and Bristol. When comparing the three, Gilead is not supply constrained, able to meet increasing demand for Yescarta and Tecartus,” BMO said in a Tuesday note. The firm upgraded shares to outperform from market perform and raised its price target to $100 from $90. The new price target implies shares rallying 27.5% from Monday’s close. Analyst Evan David Seigerman said that, in addition to Gilead’s strong therapy franchise, its improving solid tumor oncology business and durable-growth anchored by its HIV/virology division could lead to strong growth. “Our Outperform rating is supported by our analysis of the current base business (namely HIV) and positivity on the oncology franchise as the company’s next leg of growth (led by Trodelvy and Cell),” said Seigerman. “While we note that Gilead currently trades at a discount to large-cap peers, continued de-risking of its oncology franchise could drive multiple expansion.” The biotech company’s shares are down 8.7% year to date. Meanwhile, the stock has outperformed and rallied almost 26% over a 12-month period. —CNBC’s Michael Bloom contributed to this report.
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