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With the pandemic in the rearview mirror, Wall Street has mixed views on the prospects of COVID-19 vaccine makers, as the group, once the favorite among investors, is grappling with a steep decline in sales amid falling infections.
The FDA-Authorized COVID-19 makers in the U.S., Pfizer (NYSE:PFE), BioNTech (NASDAQ:BNTX), Moderna (NASDAQ:MRNA), and Novavax (NASDAQ:NVAX), have fallen from grace, with their shares sharply underperforming the S&P 500 this year.
“Significant buying opportunity,” “buy while it’s cheap,” and “dead cat bounce” were some of the terms Seeking Alpha analysts used to describe their stocks, none of which are Buy-rated, according to SA’s Quant ratings.
As COVID-19 cases started to plummet, the companies saw their fortunes reverse. Johnson & Johnson (JNJ) exited the competition this year with a request to revoke the emergency use authorization granted for its vaccine.
COVID-related products, including therapeutics, brought $21.5B in sales for U.S.-based Pfizer (PFE), Moderna (MRNA), and Novavax (NVAX) in Q2 2022, according to a Seeking Alpha analysis based on the companies’ SEC filings.
Fast forward to Q2 2023, and the products added only $2.2B in sales, indicating a ~90% YoY contraction. With no signs of a return to the heydays of the pandemic, disillusioned investors jumped ship.
However, Wall Street has become increasingly bullish on Pfizer (PFE), BioNTech (BNTX), and Novavax (NVAX) over the past three months, and Moderna (MRNA) held on to its Buy rating despite a slight decline in its analysts’ score, as indicated in this graph.
Seeking Alpha author Nathan Aisenstadt reaffirmed his Buy rating on Pfizer (PFE) on Friday, arguing that the recent decline of COVID vaccine sales may have bottomed out with the emergence of the new Omicron variant EG.5.1.
Analyst JR Research reiterated his Strong Buy rating on Pfizer (PFE) last month, expecting higher participation from value investors and arguing that the New York-based pharma giant “could be at a critical long-term inflection point.”
The contributor also upgraded Moderna (MRNA) to Buy in July based on its prospects beyond COVID, among other things, as the company expects to launch its messenger-RNA-based RSV vaccine and cancer vaccine in 2024 and 2025, respectively.
However, both TD Cowen and Deutsche Bank downgraded the Massachusetts-based biotech after the company’s Q2 2023 financials, citing concerns over its full-year outlook, which implied an uptick in the cost of sales.
On Thursday, Seeking Alpha’s Quant Rating system flagged Moderna (MRNA) as a Strong Sell, as did SA analyst Ron Struthers, who noted that the time has come to short the stock.
In July, analyst Edmund Ingham argued that both Moderna (MRNA) and BioNTech (BNTX) were “good buys” and that the pure-play vaccine makers “may be oversold” despite having a path to long-term profitability.
However, Novavax (NVAX) is a Strong Sell among SA authors even as the Maryland-based vaccine developer closed higher last week, ending seven straight sessions of losses after its better-than-expected Q2 financials.
