Morgan Stanley analyst Matthew Harrison maintained an Overweight rating on Gilead Sciences (NASDAQ: GILD) while adjusting the valuation outlook. The firm lowered the price target to $166 from the previous $168.

Rating and Price Target

The decision reflects a minor adjustment in the stock's potential upside. The revised price target of $166 suggests a decrease from the prior estimate of $168.

HSBC upgraded Gilead Sciences Inc. to Buy from Hold on Monday, arguing that consensus estimates are too pessimistic regarding the impact of generic competition. Analysts Rajesh Kumar and Dylan Whitfield raised the price target to $155 from $133, pointing to long-acting HIV therapies and oncology catalysts as key drivers for future growth. The upgrade comes as the stock trades at roughly 13 times next year's expected earnings, a valuation the firm views as attractive.

Long-Acting HIV Therapies to Offset Pressure

The analysts believe consensus models assume a steeper decline in Gilead's HIV franchise upon the loss of exclusivity for dolutegravir than is likely. They project that long-acting HIV therapies will improve patient adherence, offsetting anticipated sales pressure. Approximately 60% of patients currently have suboptimal adherence, with more than 40% taking fewer than 80% of prescribed doses. While specific launch timelines remain uncertain, these therapies are expected to support stronger-than-expected HIV revenue over time.

Oncology Pipeline and PrEP Expansion

Beyond HIV, HSBC highlighted growth potential in the pre-exposure prophylaxis (PrEP) market through Yeztugo, which is expected to become a market leader. The report also noted progress in oncology, specifically anitocabtagene autoleucel (anito-cel), a CAR T-cell therapy for multiple myeloma co-developed by Arcellx Inc and Kite, a Gilead company. Gilead acquired Arcellx for $115 per share in cash, plus a contingent value right of $5 per share, implying an equity value of $7.8 billion. The therapy is under FDA review, with a decision expected by December 2026. Additionally, Trodelvy's expansion into first-line triple-negative breast cancer, potentially alongside Merck & Co. Inc.'s Keytruda, is expected to strengthen the oncology portfolio.

Technical Performance and Analyst Consensus

Gilead stock is trading lower on Monday, underperforming a broader risk-on market rally. The stock is attempting to stabilize but faces technical hurdles, trading 2.4% above its 20-day simple moving average (SMA) but remaining below its 50-day, 100-day, and 200-day SMAs. A bearish death cross formed in July continues to signal intermediate-term weakness. The next resistance level is near $137.50, with support around $128.00.

Wall Street maintains a Buy consensus rating with an average price target of $161.23, based on data from 23 analysts. Cantor Fitzgerald recently reiterated its Overweight rating and $155 price target. Shares of Gilead Sciences were down 1.55% at $129.23 at the time of publication.