Pharma Stock Surges on Beat-and-Raise

Shares of Gilead Sciences Inc (NASDAQ:GILD) are up 4% in premarket trading, after the company delivered a strong fourth-quarter earnings beat. The biopharmaceutical giant reported $1.90 earnings per share (EPS), exceeding analyst estimates by 11.7%, on $7.57 billion in revenue -- a 6.4% year-over-year increase that topped expectations. Gilead also issued solid fiscal 2025 guidance, forecasting $28.4 billion in revenue and an adjusted EPS of $7.90, slightly above analyst projections. They also hiked their quarterly dividend to 79 cents per share.

In response to the triple play, no fewer than eight brokerages hiked their price targets, the highest coming from Morgan Stanley to $124 from $113. Despite GILD’s strong fundamentals, 12 of 29 analysts still rate the stock a "hold", while the consensus 12-month price target of $102.86 is soon to be a slim discount to today's perch. In other words, more bull notes could keep the wind at the equity's back.

If this momentum continues, Gilead Sciences stock could challenge its nearly nine-year high of $101.51, reached on Feb. 5. The stock has carved out a channel of higher highs since a May 31 two-year bottom of $62.07, gaining 42.1% over the last nine months.

Options traders are in luck as the stock's Schaeffer's Volatility Scorecard (SVS) ranks at 84 out of a possible 100. This suggests Gilead has tended to exceed options traders' volatility expectations over the past 12 months.