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The 6 key coronavirus vaccine stocks
Companies that have led the COVID-19 vaccine development up through the latest variant, Omicron.
The coronavirus pandemic has had an extraordinary effect on global stock markets. Within the first few months, benchmark stock indices in the US, UK, Australia and other places had fallen by around 30% amid unprecedented volatility.
Indeed, many shareholders were hit by heavy losses. But the sharp decline also opened the door for new buying opportunities. As the market climbed out of the deep hole it had found itself in, stocks that would complement a new work-from-home life flourished, as did the stocks of several vaccine makers.
COVID-19 vaccine stocks led the way out
Of the stocks that defied the trend in the early stages of the pandemic were a handful of biotechnology and pharmaceutical companies.
As the pandemic battered the market early on, these companies emerged as critical players in the fight against COVID-19. News of vaccine developments unleashed new momentum in the stock market, with some of these coronavirus vaccine companies seeing explosive growth over just a few months.
Key coronavirus vaccine stocks
The following coronavirus stocks are the biggest players in the space. Here’s how they’ve performed since the onset of the pandemic and what could be in store as we look ahead.
Trading at around $40 in January 2020 when the German biotechnology company, BioNTech, announced its plans to develop a potential COVID-19 vaccine with Pfizer, the company went on to become the first to win emergency use authorization (EUA) and the first, and only so far, to win full FDA approval for its vaccine. In those 19 months, shares of BioNTech grew more than 1,000% to an all-time high of $464.
BioNTech’s most recent financial results showed quarterly revenues and per-share earnings that were higher than expected. Revenue for the third quarter came in at €6.1 billion, or about $6.9 billion, up from €67.5 million for the same three months in 2020. Earnings were €12.35 per share, or $14.30, up from a loss of €0.88 in the same period last year. Gross profit from the revenue of the Pfizer-BioNTech COVID vaccine is split 50/50 between the two companies.
The company delivered more than 2 billion doses of its vaccine as of November 2 and it anticipates manufacturing capacity to reach 4 billion doses in 2022.
The stock is trading at around 39% off its 52-week high. Looking ahead, analysts give BioNTech stock a “Hold” with an average 12-month price target of $314.22.
Moderna stock was trading at around $22 per share in January 2020 when the company announced its plans to develop an mRNA vaccine candidate against COVID-19. Moderna later became the second company to win EUA in the US. It was the first-ever FDA-authorized product for the 10-year-old biotech company. Its shares were trading at around $140 at the time.
With an FDA-authorization in hand, Moderna stock saw a significant run up into the company’s second quarter financial results. After reporting record revenue and earnings, its stock reached an all-time high of $497.49. Between January 2020 and August 2021, Moderna’s stock price rose by more than 2,300%.
In conjunction with its third quarter 2021 financial results, Moderna announced a cut in its COVID-19 vaccines sales forecast for the year. Despite year-over-year growth, the drugmaker’s earnings and revenue came in below analyst estimates.
Now with FDA approval under its belt, Moderna is its COVID-19 vaccine sales could be in the range of $17 billion to $22 billion in 2022.
The stock is trading around 41% below its 52-week high. Analysts give it a “Hold” with a 12-month average price target of $301.20.
Novavax entered the COVID-19 vaccine race in late-February 2020 when its shares were trading at around $8. In the following months, the company secured more than $2 billion in funding to develop its vaccine. In less than a year, positive news of the company’s vaccine development had driven Novavax stock up by more than 4,000% to an all-time high of $331.68 per share.
Novavax is currently authorized for emergency use in Indonesia and the Philippines and was recently granted EUA by the World Health Organization (WHO). The company has completed regulatory submissions with the US, Australia, Canada, India, New Zealand, Singapore, South Korea, the UK and the European Union.
Novavax expects to have a manufacturing capacity in excess of 2 billion annual doses in 2022. Analysts rate the stock a “Buy” with an average 12-month price target of $260.60. Shares are currently trading at around 34% off its 52-week high.
Compared to BioNTech, Pfizer stock has seen only modest gains since first announcing its partnership back in March 2020. The company hit a 2020 low of $26.43 shortly thereafter before rebounding to the mid-$30s. Even after gaining EUA and full FDA approval, Pfizer stock has grown only modestly.
Pfizer expects 2021 revenues from its COVID vaccine of around $36 billion with 2.3 billion doses delivered by year end. The company also plans to deliver at least two billion doses of its vaccine to low- and middle-income countries by the end of 2022. Pfizer is also developing a COVID-19 pill that has recently shown to be effective in reducing hospitalizations and death in patients who have gotten COVID-19.
Pfizer stock is currently trading near its highest levels. Over the next 12 months, analysts expect an average share price of around $55 per share, giving the stock a “Hold.”
Johnson & Johnson
Shares of Johnson & Johnson were trading at around $150 back in January 2020 when it announced its response to COVID-19. Over the next two months, its shares dropped to a 2020 low of $109.16.
The stock climbed gradually over the next year, hitting a high of around $174 a month before receiving EUA in the US in February 2021. The Johnson & Johnson COVID-19 vaccine has been the only other vaccine to win EUA in the US.
Looking ahead, Johnson & Johnson said recently that it’s confident about delivering 1 billion doses of its COVID-19 vaccine in 2022. It’s COVID-19 vaccines are available on a not-for-profit basis for emergency use.
Shares are trading around 6% off its 52-week high of $179.92, which the company achieved in late August. Analysts rate Johnson & Johnson stock a “Buy” and give it a 12-month average price target of $187.94.
AstraZeneca announced in April 2020 that it would be collaborating with Oxford University to develop and distribute a COVID-19 vaccine. Its stock was trading at around $54 per share at the time, coming off a 2020 low of $36.15 a month before.
Shares of Astrazeneca hit an all-time-high of $64.94 in July 2020 on positive news regarding the development of its COVID-19 vaccine. Most recently, the company was reportedly dropping its plans to test its COVID vaccine as a booster in the US. The UK drugmaker has also yet to receive EUA for its shot in the US.
Astrazeneca stock is trading at around 13% below its 52-week high of $64.21. Analysts give AstraZeneca a “Buy” rating and see an average 12-month price target of $67.68 per share.
What might happen from here
COVID-19 variants have already shown that they can continue to shake the market, but they haven’t had the same effect as the initial phase.
If variants of the SARS-CoV-2 virus continue to crop up and it morphs into another virus where annual shots are needed, COVID-19 vaccine stocks may continue to hold onto some of the spotlight.
What ETFs track the coronavirus vaccine sector?
Here are a couple of exchange-traded funds (ETFs) that launched in the midst of the pandemic that are focused on infectious diseases and biological threats:
- ETFMG Treatments Testing and Advancements ETF (GERM). Designed to give exposure to companies engaged in the testing and treatments of infectious diseases. Top holdings include Laboratory Corp. of America Holdings, BioNTech, Moderna and Novaxax.
- Pacer BioThreat Strategy ETF (VIRS). Seeks to track the LifeSci BioThreat Strategy Index. Its top holdings include Thermo Fisher Scientific, Abbott Labs and Johnson & Johnson.
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How to invest when there’s a market crash
When markets crash, it can be tempting to sell your shares in an attempt to avoid further losses. But this is not necessarily the best strategy, especially if you hesitate on pulling the trigger.
Stock market downturns are a reality and must be considered alongside the record gains of recent years. It’s often a better idea to ride out the volatility rather than try to time the market.
Know your strategy
Your best course of action in the event of a crash will depend on your trading strategy and overall investment goals, according to Michael McCarthy, chief market strategist for share-trading platform CMC Markets, who spoke to Finder. “In most cases, investors should be reviewing closely and working out what a 10% drop or a 20% drop would mean to their holdings. Whereas somebody who’s taking a more active approach might start weeding their portfolio.”
It’s important to know what your goals are and whether a crash has impacted your ability to achieve those goals. It is possible that a crash gives you some good reasons to sell.
Be prepared to buy the dip
When markets dip, you can make money. The key thing is to be ready for this to happen and to have the funds to snap up shares when the prices are low.
Timing the market is incredibly hard and you’re very unlikely to get the stock at its absolute lowest, but as with all investments, if your intention is to hold for the long term, it can be a good opportunity to snap it up at a lower cost.
One way to prepare if you’re an active investor is to keep a list of stocks that you would be willing to buy if a crash happens.
Seek financial advice
When stocks are crashing, it is easy to get swept up by your emotions. If 20% of your portfolio value has been knocked off, you might not be in the right frame of mind to be making decisions which could impact your financial future.
Seeking a second opinion, ideally from a financial adviser, can give you some perspective on your thinking and guard against any rash decisions.
What happens after a crash?
Following a market crash, stocks are likely to experience a period of volatility as investors re-evaluate the market. But downturns can also represent investment opportunities, especially if there are certain stocks you think may have switched from overvalued to undervalued.
Cautious investors may often flock to “safe haven” investments like gold, bonds or even bitcoin, so a market downturn may be a good time to think about diversifying your investment portfolio.
If history is any indicator, the markets should eventually rebound, but trying to determine when this will happen is the million-dollar question. Stocks may recover within weeks or months, or we may be faced with a years-long bear market, especially if global recession fears turn out to be on the money.
How to profit from a falling market
It’s possible for traders to profit when prices are falling through a strategy called “shorting the market”. Because this is typically a risky strategy, only experienced traders are advised to do this.
The most common ways that people can profit from falling equity, currency or commodity prices is through inverse ETFs, forex or options trading.
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