Top Best Covid-19 vaccine stocks for growth and value investors: Pfizer, Moderna, Novavax, BioNtech or Johnson& Johnson
|Photo: Getty Image.|
To date, each stock has outperformed the S&P 500 since the bear market began in mid-February, with many posting healthy to downright gaudy gains.
According to The Fool, Comirnaty (BNT162b2), the vaccine developed by BioNTech (NASDAQ:BNTX) and its big partner Pfizer (NYSE:PFE), had the highest overall efficacy in late-stage testing. But Moderna's (NASDAQ:MRNA) efficacy for mRNA-1273 was nearly as high. The biotech also developed a formulation that doesn't have the stringent ultracold storage requirements that Comirnaty does.
Johnson & Johnson (NYSE:JNJ) just reported an OK but not overly impressive efficacy result for its vaccine. However, it requires only a single dose -- a big plus. Then there's Novavax (NASDAQ:NVAX). The biotech announced great efficacy and safety results for its COVID-19 vaccine last week. The downside is that the results are from a U.K. study. It will be a few more months before Novavax's results from a study conducted in the U.S. and Mexico are available.
The same "it depends" answer also applies to the question about which of these is the best COVID vaccine stock. Here's how I think Pfizer, BioNTech, Moderna, Johnson & Johnson, and Novavax rank for different kinds of investors.
Novavax for growth investors
Now for the most difficult choice: picking the best of these stocks for growth investors. The tables are turned this time. Neither Pfizer nor Johnson & Johnson have sales and earnings growth potential that's as big as the smaller biotech stocks.
So which growth stock wins in a head-to-head matchup between Moderna and Novavax? It should be Novavax. Perhaps most importantly, Novavax's market cap is a lot smaller than Moderna's. That should give Novavax more room to run if its COVID-19 vaccine wins emergency use authorizations (which I'm confident that it will).
This ties into another reason why Novavax is the better choice for growth investors. The biotech still has multiple key catalysts on the way for its NVX-CoV2373 coronavirus vaccine, including potential U.K. authorization, late-stage results from its U.S./Mexico study, and potential U.S. emergency use authorization.
Novavax also has another promising candidate that has a great chance of winning regulatory approvals -- flu vaccine NanoFlu. If approved, NanoFlu could become a blockbuster in its own right. As an added bonus, Novavax is exploring the potential of developing a combo COVID/flu vaccine featuring NVX-CoV2373 and NanoFlu.
Pfizer is good for value investors
It's not a tough decision to select the best COVID vaccine stock for value investors, either. Value investors typically focus on metrics based on earnings or sales. That knocks BioNTech, Moderna, and Novavax from the list.
Based on any of the most commonly used valuation metrics, Pfizer appears to be the winner versus Johnson & Johnson. For example, Pfizer shares trade at less than 11.5 times expected earnings. J&J stock trades at nearly 19 times expected earnings.
Pfizer and Johnson & Johnson are for conservative investors, here is why
My view is that Pfizer and Johnson & Johnson are great picks for more conservative investors, especially retirees and others who want an income from dividends. I think that Novavax is the best choice for more aggressive investors seeking strong growth.
The good news, though, is that all of these stocks could be winners over the long run. Moderna offers a tantalizing platform based on its messenger RNA (mRNA) technology. BioNTech also has promising mRNA vaccines and therapies in development plus candidates using other approaches. I suspect that 10 years from now, investors who bought any of these stocks won't have regrets.
|IMAGE SOURCE: GETTY IMAGES.|
What we know so far about these five Covid-19 vaccine stocks:
• Market value: $24.8 billion
• Performance since market peak: +252.5%
Moderna (MRNA, $66.69) is a major player in the race to develop a coronavirus vaccine, and at the moment, it might be the most exciting name in the space, according to Kiplinger.
Moderna recently raised $500 million through a public offering and has access to more than $2 billion to invest in its research programs. The company is not yet profitable given a lack of marketed products. But the $490 million to $510 million it plans to spend on operations this year will be more than covered by cash on hand of $1.1 billion.
• Market value: $2.5 billion
• Performance since market peak: +448.8%
Novavax (NVAX, $43.63) surged in late February after the company updated its progress on developing a coronavirus vaccine. The pharma stock was assessing multiple vaccine candidates and expected to begin human testing in late spring.
Unlike many larger pharmaceutical companies, Novavax is not currently profitable. It reported a $132.7 million net loss in 2019 thanks to heavy spending on research and development. That said, thanks to stock sales and other cash raises, the company had $244.7 million in cash and short-term investments at the end of Q1 2020. Alongside its earnings report, released in May, NVAX announced that the Coalition for Epidemic Preparedness Innovations (CEPI) had awarded it an incremental $384 million in funding.
Oppenheimer analyst Kevin DeGeeter (Outperform) recently lifted his price target on shares from $19 to $38.50, calling NVAX stock a "first-tier" play among health and pharmaceutical companies fighting the coronavirus.
Johnson & Johnson
Johnson & Johnson (JNJ) expects to "soon" unveil the results of its coronavirus vaccine in Phase 3 testing, the company said in its fourth-quarter report — leading JNJ stock to pop, Investors rerported.
JNJ stock hit a fresh high on Jan. 26 after the company reported better-than-expected fourth-quarter sales and earnings. Wall Street is also hopeful for the company's one-shot coronavirus vaccine, separating it from Pfizer's (PFE) and Moderna's (MRNA) two-shot drugs.
In mid-January, Johnson & Johnson said its coronavirus vaccine was safe and effective in a key test. That prompted JNJ stock to pop. Neutralizing antibodies generated in response to the Covid jab were durable through day 71 — the latest time point in testing.
If the vaccine proves safe and effective, the company plans to ask the Food and Drug Administration for emergency use authorization. However, a report earlier in the month suggested that it was running behind on supplies.
Pfizer in Earnings Mix
Pfizer (PFE) stock remains a well-priced, calculated investment with a couple of aces up its sleeve.
To be clear, Pfizer stock is never going to produce GME or TSLA stock-like returns. Contributor Chris Tyler on Investor Place said that he thinks PFE’s subpar, non-dividend adjusted flatline performance in 2020 amid the coronavirus is the latest testament to the obvious. However, investors can still grow their wealth handsomely over time. And today there’s no time like the present to begin that journey.
Technically and out-the-gate in Friday’s session, shares of PFE are bucking the broader market and up about 2%. Again, that’s not a bucking bronco like GME, which is up more than 80%. Still, it’s the type of price action that deserves respect.
The bullish pattern has developed within the upper region of a key support area from roughly $33.50 – $36.50 comprised of multiple trend lines and Fibonacci levels.
BioNTech doesn't claim a multibillion-dollar product lineup as Pfizer does. It doesn't offer a dividend. It's unprofitable. So what does the German biotech have that Pfizer doesn't? Its relatively small size should give it more room to grow, according to the Fool.
Everything good about how Comirnaty will help Pfizer can be cranked up several levels with BioNTech. The much smaller drugmaker will benefit more from the aforementioned nearly $9.5 billion projected revenue this year than Pfizer will. That money will likely vault BioNTech into profitability in short order.
Despite its big gains last year, BioNTech's market cap remains below $30 billion. That reflects a share price of only around three times expected sales -- a really low level for a biotech stock.
Comirnaty is currently BioNTech's only late-stage program. However, the company is working with Roche to evaluate messenger RNA (mRNA) therapy BNT122 in a phase 2 study as a first-line treatment for melanoma.
BioNTech's pipeline primarily features early stage programs. The biotech is evaluating 11 candidates in phase 1 studies for treating various types of cancer. In addition, BioNTech has multiple preclinical programs, including an experimental mRNA flu vaccine it's developing with Pfizer and a promising experimental multiple sclerosis vaccine. It seems likely that BioNTech will use its newfound wealth from Comirnaty to advance more preclinical programs into clinical studies.
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