Investors are underestimating the growth potential of Gilead Sciences ' growing oncology business and expanding HIV portfolio, according to JPMorgan. Analyst Chris Schott upgraded shares of the biopharmaceutical company to overweight, highlighting in a note to clients Tuesday that the company's strong HIV business and his expectations for continued growth from Gilead's oncology franchise. "At current levels, we see GILD's HIV business alone supporting the stock's entire market cap," he said. "And with an oncology franchise that we forecast to reach ~$5bn in sales by 2030 as well as potential upside to lenacapavir estimates over time, we see shares as clearly undervalued at current levels." Gilead recently settled a patent with some generic HIV drugmakers which Schott sees as a catalyst for the company. He also highlighted Gilead's newer lenacapavir prevention treatment administered every six months and not yet approved by the FDA as another potential opportunity for the business going forward. "Overall, we have GILD's HIV franchise growing a low single digit CAGR through the early 2030s," Schott wrote. "During this time, we see Biktarvy (2033 IP) remaining the dominant product in the treatment market with revenues growing from $10.2bn in 2022 to $12.5bn in 2025 and Descovy (2031 IP) as well-positioned in PrEP," he said. Gilead shares have slumped more than 14% this year and sit about 16% off their 52-week highs. Schott raised the firm's price target on the stock to $80 from $72 a share, suggesting a more than 28% upside for the stock in the near term. Gilead shares ticked 2% higher in premarket trading. — CNBC's Michael Bloom contributed reporting
