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Gilead Sciences Price Target Update

|Includes:Gilead Sciences, Inc. (GILD)

A brief update on a short-term price target. On its web site, Gilead Sciences (NASDAQ:GILD) publishes analyst's EPS estimates for 2014, 2015 and 2016. Consensus estimates are as follows:

Analyst Forecasts - EPS
  Last Month Revisions
Fiscal Period   Mean High Low Median # of Estimates #Up #Down Mean % Change
Annual Dec 16 10.15 13.70 7.55 10.00 23 19 1 11.60
Annual Dec 15 9.07 12.02 7.00 9.23 26 21 0 15.56
Annual Dec 14 7.67 9.16 5.00 7.98 25 22 0 21.52

My sense is that given low and dropping interest rates available to owners of capital, an implied 10% earnings yield two years from now will be viewed as attractive, given Gilead's long-term growth potential. Thus I think that $100 is a reasonable short-term price target. Investors should be aware, though, that I do not leverage positions and do not own or intend to own any weekly or 1-2 month options on GILD. Thus I actually have bought GILD shares and long-term GILD naked calls this week.

Disclosure: The author is long GILD.

Additional disclosure: Not investment advice. I am not an investment adviser.

Stocks: GILD