S&P 500 (SPY) Remains Mixed In Choppy Trading

Key Insights

  • Stocks are swinging between gains and losses at the start of the week. 
  • Healthcare stocks got hit after Joe Biden declared that pandemic was over. 
  • Energy stocks rebound from session lows as oil markets recover after sell-off. 

Healthcare Stocks Dive After Biden’s Comments On The Pandemic

S&P 500 continues its attempts to settle below 3850 as Treasury yields keep moving higher ahead of the Fed Interest Rate Decision. Traders prepare for an aggressive Fed, and the yield of 2-year Treasuries is trying to settle above the 3.95% level.

It should be noted that today’s pullback is not broad. Healthcare stocks are the worst performers today as U.S. President Joe Biden said that pandemic was over. Moderna stock was down by almost 10% while Pfizer lost 2% in today’s trading.

Big tech stocks show mixed performance. Apple rebounds after the recent setll-off, while Microsoft is testing new lows.

Energy stocks rebounded from session lows together with oil markets. However, leading energy stocks like Exxon Mobil and Chevron have not managed to get back to the positive territory.

Trading will likely remain nervous ahead of the Fed decision. Markets have probably priced in a 75 bps rate hike, and the key question is whether Fed Chair Jerome Powell sends a hawkish signal.

At this point, traders are worried that aggressive rate hikes will push the economy into a real recession, which is accompanied by job losses and reduced profits for corporations. In this light, the market will be extremely sensitive to Powell’s comments.

Support At 3850 Stays Strong

S&P 500

S&P 500 settled below the 3885 level and continues to test the support at 3850. RSI remains in the positive territory, so there is plenty of room to gain additional downside momentum in case the right catalysts emerge.

If S&P 500 mananges to settle below 3850, it will head towards the next support level at 3825. A successful test of this level will open the way to the test of the next support at 3800.

On the upside, the nearest resistance level for S&P 500 is located at 3885. If S&P 500 climbs back above this level, it will head towards the next resistance at 3900. A move above 3900 will push S&P 500 towards the resistance at 3920.

For a look at all of today’s economic events, check out our economic calendar.

Novavax Is Down By 6%, Here Is Why

Key Insights

  • Novavax vaccine gets approval in Japan, but the news fails to provide any support to the stock. 
  • Vaccine stocks remain under pressure as traders worry that demand for coronavirus vaccines will decline in the upcoming years. 
  • Novavax is cheap at just 4 forward P/E, but falling earnings estimates signal that analysts remain concerned about the company’s future performance. 

Novavax Stock Declines Amid Broad Weakness In Vaccine Stocks

Shares of Novavax  moved to yearly lows after Japanese Health Ministry committee approved the company’s coronavirus vaccine.

While the news is positive for Novavax, the market believes that the company is “late to the party”. The world’s focus is moving away from the coronavirus pandemic, and it remains to be seen whether vaccines will enjoy strong demand in 2023 and beyond.

Shares of other vaccine makers are also under pressure during the current trading session. Moderna stock is down by 4%, while BioNTech stock is down by almost 7%.

It should be noted that recent reports about a potential waiver of intellectual property rights for coronavirus vaccines and treatments also put pressure on vaccine-related stocks.

What’s Next For Novavax Stock?

Analysts expect that Novavax will report earnings of $22.84 per share in the current year and earnings of $14.36 per share in the next year, so the stock is trading at just 4 forward P/E.

However, analyst estimates have declined materially in recent months, and traders are worried that they could move lower. In addition, it is not clear whether demand for coronavirus vaccines will stay strong in the upcoming years.

Earnings visibility is a problem for all vaccines makers, but Novavax stock is under more pressure as the company’s vaccine has lost competition for market share.

In this light, it remains to be seen whether speculative traders will try to “catch the falling knife” and buy Novavax stock at yearly lows. At this point, it looks that the stock has a good chance to develop additional downside momentum in the upcoming trading sessions.

For a look at all of today’s economic events, check out our economic calendar.

Why Moderna Stock Is Up By 18% Today

Key Insights

  • Vaccine stocks rally amid a major coronavirus outbreak in China.
  • Moderna starts a clinical trial of an experimental HIV trimer mRNA vaccine.
  • Earnings visibility remains the key problem for Moderna.

Moderna Stock Rallies As China Faces A New Wave Of Coronavirus

Shares of Moderna gained strong upside momentum after the company announced  that “the first participant has been dosed in a clinical trial of an experimental human immunodeficiency virus (HIV) trimer mRNA vaccine (mRNA-1574)”.

The company noted that while developing a vaccine against HIV has been difficult to achieve, it believed that mRNA technology offered a new opportunity.

The market has been worried that Moderna’s revenues will drop when the coronavirus pandemic comes to an end. The development of the HIV vaccine boosts hopes that Moderna will not be a “one-trick pony”, and the company will ultimately find other sources of revenue.

It should be noted that other vaccine-related stocks like BioNTech and Novavax have also been moving higher today as China was forced to impose new curbs amid the rapid spread of coronavirus in Shenzhen.

What’s Next For Moderna Stock?

Earnings estimates for Moderna have been moving lower in recent weeks. Currently, analysts expect that the company will report earnings of $27.15 per share in 2022. The company’s profits are projected to decline to $10.13 per share in 2023, so the stock is trading at roughly 16 forward P/E for the next year.

It should be noted that earnings visibility remains the key problem for Moderna as it is not clear whether the company will be able to find additional sources of revenue when the revenue from its coronavirus vaccine declines.

While the recent news on the HIV vaccine make a good headline, it should not help Moderna financially in the near future. However, Moderna stock will remain a decent choice for those traders who are willing to bet on the long-term success of the mRNA technology.

For a look at all of today’s economic events, check out our economic calendar.

Pfizer Nears Long-Term Buying Opportunity

Dow component Pfizer Inc. (PFE) is trading near a four-month low on Wednesday, continuing to lose ground despite a 25% haircut since posting an all-time high at 61.71 in December. The selloff has coincided with an even larger Moderna Inc. (MRNA) decline, driven by crashing infection numbers and the emergence of protein-based vaccines that are better suited to worldwide distribution because they don’t require storage at low temperatures.

Paxlovid Profit Potential

Even so, Pfizer investors are well-positioned due to the rollout of the Paxlovid anti-viral drug, which should become the treatment of choice in the Western world in coming months.  On Tuesday, the Biden administration announced the drug will be free for Americans if they test positive at a local pharmacy. The program is now being rolled out at hundreds of sites, including pharmacy departments at Kroger Company (KR), CVS Health Corp. (CVS) and Walgreen-Boots Alliance Inc. (WBA) Inc.

Jefferies just sounded the alarm about protein based vaccines and their impact on PFE profits, with strategist Will Sevush cautioning “This is bad for mRNA. This is bad for Pfizer”. Analyst Peter Welford was more nuanced, warning that “it is feasible that some patients may prefer to opt for a protein-based vaccine as a booster shot if one is available. In the developing world, where there are still large unvaccinated populations, the ability to store protein-based vaccines at normal refrigerator temperatures could facilitate distribution.”

Wall Street consensus has cooled in recent months, now standing at an ‘Overweight’ rating based upon 11 ‘Buy’, 14 ‘Hold’, and 0 ‘Sell’ recommendations. Price targets currently range from a low of $49 to a Street-high $78 while the stock is set to open Wednesday’s session about $3 below the low target and $11 below the $57 median target. This dismal placement highlights analyst confusion about the direction of Pfizer profits in the post-pandemic world.

Wall Street and Technical Outlook

Pfizer completed a cup and handle breakout above 22-year resistance in the mid-40s in November 2021, lifting to an all-time high in December. The subsequent decline has now returned to breakout support, which has narrowly aligned with the 200-day moving average and .786 Fibonacci rally retracement level. Ukraine-induced volatility could delay buying interest but long-term term relative strength readings are rapidly approaching oversold levels, raising odds the stock will eventually bottom around this price zone.

Catch up on the latest price action with our new ETF performance breakdown.

Disclosure: the author held no positions in aforementioned securities at the time of publication. 

Moderna Shares Soar on Earnings Beat, Upbeat Vaccine Sales Outlook

Moderna shares surged over 11% on Thursday after the biotech company reported better-than-expected earnings in the fourth quarter and forecasts that vaccine sales will increase during the second half of the year.

The Massachusetts-based biotechnology company reported quarterly adjusted earnings of $11.29​​ per share, beating the Wall Street consensus estimates of $9.90 per share. The company said its revenue soared 1,163.4% to $7.21 billion from a year earlier. That too topped the market expectations of $6.79 billion.

Moderna said sales of the company’s vaccine are expected to increase to $19 billion this year, higher than the previous forecast of $18.5 billion.

On Thursday, Moderna stock traded over 11% higher at $150.01. The stock fell over 40% so far this year after surging over 140% in 2021.

Analyst Comments

Moderna reported Q4 in line w/ the preannouncement and slightly raised the 2022 orderbook by $500M to $19B (total $22B w/ options is the same; just converted some options to orders). Co remains in active discussions for orders for 2022 and has orders for 2023 from some countries. As Street struggles w/ where the pandemic is going, the next catalysts are Phase II flu data and COVID waves and fluidity, in our view,” noted Michael J. Yee, equity analyst at Jefferies.

Moderna Stock Price Forecast

Fourteen analysts who offered stock ratings for Moderna in the last three months forecast the average price in 12 months of $265.00 with a high forecast of $506.00 and a low forecast of $85.00.

The average price target represents an 81.59% change from the last price of $145.93. Of those 14 analysts, four rated “Buy”, nine rated “Hold”, while one rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $213 with a high of $474 under a bull scenario and $34 under the worst-case scenario. The investment bank gave an “Equal-weight” rating on the biotechnology company’s stock.

“We are Equal-weight Moderna. While we believe there is long-term upside for Moderna, we believe the significant valuation increase associated with the success of the COVID-19 vaccine limits the near-term upside,” noted Matthew Harrison, equity analyst at Morgan Stanley.

“The company has taken an industrialized approach to developing mRNA based therapeutics and has rapidly generated a broad pipeline of 21 programs, 11 of which have entered clinical development. We believe Moderna’s mRNA drug development platform is more diversified and scalable compared with competitors, and is validated through broad partnerships with Merck and AstraZeneca. We see vaccines and rare diseases as the key valuation drivers of the company.”

Several analysts have also updated their stock outlook. SVB Leerink cut the target price to $85 from $86. Cowen and company lifted the price target to $250 from $200. Deutsche Bank lowered the target price to $175 from $200.

Technical analysis suggests it is good to sell as 100-day Moving Average and 100-200-day MACD Oscillator gives a strong selling opportunity.

Check out FX Empire’s earnings calendar

Moderna to Post Multi-Fold Jump in Q4 Earnings and Revenue

Moderna, the biotech company focused on drug discovery, is expected to report its fourth-quarter earnings of $8.62 per share, which represents year-over-year growth of over 1,340% from a loss of -$0.69 per share seen in the same period a year ago.

The Massachusetts-based biotechnology company would post revenue growth of 1,075% to around $6.71 billion up from $570.75 million a year earlier.

According to ZACKS Research, the company forecasts sales of $17.5 billion in 2021. It also has advance purchase agreements worth nearly $20 billion for 2022 for the vaccine.

On Wednesday, Moderna stock was trading 5.53% lower at $136.94. The stock fell over 45% so far this year after surging over 140% in 2021.

Analyst Comments

“We are Equal-weight Moderna. While we believe there is long-term upside for Moderna, we believe the significant valuation increase associated with the success of the COVID-19 vaccine limits the near-term upside,” noted Matthew Harrison, equity analyst at Morgan Stanley.

“The company has taken an industrialized approach to developing mRNA based therapeutics and has rapidly generated a broad pipeline of 21 programs, 11 of which have entered clinical development. We believe Moderna’s mRNA drug development platform is more diversified and scalable compared with competitors, and is validated through broad partnerships with Merck and AstraZeneca. We see vaccines and rare diseases as the key valuation drivers of the company.”

Moderna Stock Price Forecast

Fourteen analysts who offered stock ratings for Moderna in the last three months forecast the average price in 12 months of $265.00 with a high forecast of $506.00 and a low forecast of $85.00.

The average price target represents a 92.61% change from the last price of $137.59. Of those 14 analysts, four rated “Buy”, nine rated “Hold”, while one rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $213 with a high of $474 under a bull scenario and $34 under the worst-case scenario. The investment bank gave an “Equal-weight” rating on the biotechnology company’s stock.

Several analysts have also updated their stock outlook. SVB Leerink cut the target price to $85 from $86. Cowen and company lifted the price target to $250 from $200. Deutsche Bank lowered the target price to $175 from $200.

Technical analysis suggests it is good to sell as 100-day Moving Average and 100-200-day MACD Oscillator gives a strong selling opportunity.

Check out FX Empire’s earnings calendar

Why Moderna Stock Is Down By 6% Today

Key Insights

  • Vaccine stocks remain under pressure due to poor earnings visibility
  • Moderna is set to release its earnings report on February 24
  • The stock will need strong upside catalysts to change the current trend

Moderna Stock Falls As Traders Stay Bearish On Vaccine Stocks

Shares of Moderna gained downside momentum after the company announced a 15-year strategic collaboration agreement with Thermo Fisher Scientific, which will produce the company’s coronavirus vaccine and other mRNA medicines in the pipeline.

However, the announcement did not serve as a bearish catalyst for Moderna, and the stock moved lower due to general market pressure and expectations for the end of the pandemic. Other vaccine stocks like BioNTech and Novavax have also found themselves under pressure.

Interestingly, analyst estimates for Moderna’s 2022 earnings have been moving higher in recent weeks. Currently, analysts expect that Moderna will report earnings of $28.32 per share this year, so the stock is trading at just 5 forward P/E.

What’s Next For Moderna Stock?

Poor earnings visibility remains the key problem for Moderna. In the near term, the company’s financial results will be very strong, but the market questions the company’s ability to repeat this performance in 2023 and beyond.

In addition, Moderna is set to release its full-year 2021 report on February 24, so some traders prefer to cut their risks ahead of this event.

To have sustainable upside, Moderna must provide investors with a clear path to future profitability without the current reliance on the coronavirus vaccine. It remains to be seen whether this is realistic in the near term.

In case the market remains skeptical about Moderna’s future revenue, the stock will remain under pressure together with other vaccine stocks. The current market consensus implies that Omicron was the last significant variant of coronavirus, and the end of the pandemic is near. While this scenario is bullish for the world economy, it is bearish for Moderna.

For a look at all of today’s economic events, check out our economic calendar.

No Buyers Ahead of Moderna Report

Moderna Inc. (MRNA) reports Q4 2021 results in Thursday’s pre-market, with analysts looking for a profit of $9.81 per-share on $6.73 billion in revenue. If met, earnings-per-share (EPS) will compare favorably with the $0.60 loss booked during the same quarter in 2020.  The stock fell 17.9% in November after missing Q3 estimates by wide margins and lowering 2021 guidance. It has relinquished another 38% through February and has now fallen more than 70% since posting an all-time high just six months ago.

Spikevax adaptation has slowed dramatically in first world countries while Moderna has been forced to reduce profit margins before shipping to Africa and South America. The company has other drugs in the pipeline but none will overtake the historic success of the COVID compound, raising questions about long-term valuation. Worse yet, new variants are unlikely to have a dramatic effect on vaccination rates, with millions now choosing natural immunity, committed to returning to a normal life regardless of the costs.

Deutsche Bank analyst Emmanuel Papadakis upgraded Moderna to ‘Hold’ in January, noting “key for the recovery of sentiment will be a clearer path to additional durable long-term revenue streams of significance. With RSV/CMV P3 likely 2023 read outs and EBV still early, the question is then what may drive that re-appraisal in 2022. We can see several datapoints of note, though at this stage we are not clear whether these are likely to be sufficient ahead of those key 2023 datapoints”.

Wall Street consensus has improved to an ‘Overweight’ rating in the last three months, based upon 7 ‘Buy’, 2 ‘Overweight’, 11 ‘Hold’, 0 ‘Underweight’, and 1 ‘Sell’ recommendations. Price targets currently range from a low of $85 to a Street high $506 while the stock is set to open Wednesday’s session halfway between the low and $221 median target. This placement suggests that Moderna is rapidly approaching ‘fair value’ after two years of intense volatility.

Moderna broke out to a new high in the first quarter of 2020, entering an historic uptrend that unfolded through three rally waves before topping out near 500 in August 2021. It’s now sold off in three waves, piercing support at the .618 Fibonacci rally retracement at 200 in January. The stock is deeply oversold on a weekly and monthly basis but it will still take a 50+ point bounce to generate longer-term buy signals.

Catch up on the latest price action with our new ETF performance breakdown.

Disclosure: the author held no positions in aforementioned securities at the time of publication.

Wall Street Week Ahead Earnings: Caesars Entertainment, Home Depot, Lowe’s and Moderna in Focus

Investors will focus on December quarter earnings for stocks that are economically sensitive, which should show better profits than technology stocks. Increasing Treasury yields and risk aversion could hit the stock market hard over the coming months. In addition, investors will closely monitor the latest news on the rapidly spread Omicron coronavirus variant to see how it impacts earnings in 2022.

Earnings Calendar For The Week Of February 21

Monday (February 21)

The New York Stock Exchange and NASDAQ will all be closed on Monday, February 21 for President’s Day.

Tuesday (February 22)

IN THE SPOTLIGHT: CAESARS ENTERTAINMENT, HOME DEPOT

CAESARS: The largest casino-entertainment Company in the U.S. company is expected to report its fourth-quarter loss of $-0.71 per share, up over 58%, better compared to a loss of $-1.7 per share seen in the same period a year ago. The Las Vegas-based company would post revenue growth of over 77% to $2.58 billion.

Caesars Entertainment (CZR) is currently trading at below its historical NTM multiple on 2023e EBITDAR, despite our expectation of >1,000bps higher core casino margins and faster growth. We believe regional casino markets (55% of mix) have structural tailwinds from customers acquired post-COVID and sports betting legalization,” noted Thomas Allen, equity analyst at Morgan Stanley.

“We expect CZR to improve its sports betting / iGaming market share in coming qtrs, a key driver to Gaming stocks in recent years. High leverage now (7.5x at YE21) but significant FCF and a planned Vegas asset should drive leverage to ~5x by YE22, opening up a broader investor base.”

HOME DEPOT: The largest home improvement retailer in the United States is expected to report its fourth-quarter earnings of $3.22 per share, which represents year-over-year growth of over 17% from $2.74 per share seen in the same period a year ago.

The home improvement retailer would post revenue growth of over 7% to $34.6 billion. The company has beaten consensus earnings estimates in most of the quarters in the last two years, at least.

“We are Overweight Home Depot (HD) given its best-in-class nature and structural housing tailwinds beyond N-T disruption from COVID-19. The stock seems attractively valued in the context of a potential 2021/2022 economic/housing boom,” noted Simeon Gutman, equity analyst at Morgan Stanley.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE FEBRUARY 22

TICKER COMPANY EPS FORECAST
CNP CenterPoint Energy $0.33
HR Healthcare Realty Trust $0.44
HD Home Depot $3.22
M Macy’s $1.91
MDT Medtronic $1.38
PANW Palo Alto Networks $-0.42
TOL Toll Brothers $1.26

 

Wednesday (February 23)

IN THE SPOTLIGHT: LOWE’S

Home improvement retailer Lowe’s is expected to report its fourth-quarter earnings of $1.69 per share, which represents year-over-year growth of over 27% from $1.33 per share seen in the same period a year ago. The company that distributes building materials and supplies through stores in the United States would post revenue growth of over 2% to $20.82 billion.

“We view Lowe’s (LOW) favourably given its longer-term transformation opportunity and structural industry tailwinds, with substantial near-term uplifts from COVID-19 spending shifts that likely translate to longer-term sales retention,” noted Simeon Gutman, equity analyst at Morgan Stanley.

“Assuming a healthy underlying housing backdrop, we think comps can accelerate longer-term from stronger sales/sq ft trends, driven by e-comm accelerating, better in-stocks, product refreshes/exclusive launches, greater traction with Pro initiatives, and removing friction from the customer shopping experience. Combined with productivity initiatives, this should enable EBIT margin expansion going forward.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE FEBRUARY 23

TICKER COMPANY EPS FORECAST
BBWI Bath & Body Works $2.25
BCS Barclays $0.29
EBAY eBay $0.82
HEI Heico $0.57
NTAP NetApp $1.07

 

Thursday (February 24)

IN THE SPOTLIGHT: MODERNA

Moderna, the biotech company focused on drug discovery, is expected to report its fourth-quarter earnings of $8.62 per share, which represents year-over-year growth of over 1,340% from a loss of -$0.69 per share seen in the same period a year ago.

The Massachusetts-based biotechnology company would post revenue growth of 1,075% to around $6.71 billion.

“We are Equal-weight Moderna. While we believe there is long-term upside for Moderna, we believe the significant valuation increase associated with the success of the COVID-19 vaccine limits the near-term upside,” noted Matthew Harrison, equity analyst at Morgan Stanley.

“The company has taken an industrialized approach to developing mRNA based therapeutics and has rapidly generated a broad pipeline of 21 programs, 11 of which have entered clinical development. We believe Moderna’s mRNA drug development platform is more diversified and scalable compared with competitors, and is validated through broad partnerships with Merck and AstraZeneca. We see vaccines and rare diseases as the key valuation drivers of the company.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE FEBRUARY 24

TICKER COMPANY EPS FORECAST
ADSK Autodesk $0.89
AXON Axon Enterprise $-0.07
SQ Block $-0.06
CVNA Carvana $-0.76
DELL Dell Technologies $1.94
DISCA Discovery $0.84
GCI Gannett $-0.03
NTES NetEase $0.82
NKLA Nikola $-0.46
VMW VMware $1.44
ZS Zscaler $-0.57

 

Friday (February 25)

TICKER COMPANY EPS FORECAST
AES AES Corp. $0.46
CNK Cinemark Holdings $-0.16
DSX Diana Shipping $0.30
SSP E.W. Scripps $0.46
FL Foot Locker $1.46

 

Why Moderna Stock Is Down By 13% Today

Moderna Stock Drops As Skepticism About Future Vaccine Sales Grows

Shares of Moderna gained downside momentum after the FDA postponed a meeting on the authorization of Pfizer/BioNTech vaccine for children aged from six months to 5 years.

Moderna stock is already down by more than 70% from the highs that were reached back in August 2021, but there is no rush to buy the stock as traders question the future of vaccine sales.

Currently, analysts expect that Moderna will report earnings of $28.32 per share in 2022, so the stock is trading at 5 forward P/E. However, the market is worried that the company’s earnings will dive in 2023 as demand for vaccines may decrease.

What’s Next For Moderna Stock?

The dynamics of Moderna stock will depend on the market’s evaluation of the future trajectory of the coronavirus pandemic. The recent protests around the world highlighted people’s pandemic fatigue, and political pressure to ease coronavirus-related restrictions is clearly growing.

In addition, the rapid spread of Omicron did not lead to a collapse of the healthcare system, boosting hopes that the pandemic is finally coming to an end. This is bullish for the economy but bearish for the stocks of vaccine makers.

The original enthusiasm towards Moderna’s stock has almost evaporated, and the market is worried that the company is a “one-trick pony”. It is hard to predict the vaccine sales in 2023 and beyond as they will depend on the course of the pandemic and on whether any variants emerge, so traders will likely follow general market sentiment.

At this point, the market completely ignores the coronavirus pandemic and is focused on inflation and Fed’s interest rate decisions. In this environment, Moderna stock may have more room to fall in the upcoming trading sessions, together with other vaccine stocks like BioNTech and Novavax.

For a look at all of today’s economic events, check out our economic calendar.

Are Biotech Stocks Still Worth Buying in 2022?

Even as most countries started seeing rapid vaccination campaigns being rolled out, major pharmaceutical companies including Moderna, Johnson & Johnson, and Pfizer saw their stocks slide as the year drew to a close.

Volatile Markets and Underperforming Stocks

At close on Tuesday, 8 February, vaccine makers, including Novavax (NVAX) and Moderna (MNRA) fell by 11.97% and 4.43%, respectively. Novavax is down more than 60% since its peak in November, with Pfizer (PFE) slipping 8.07% over the month, and still declining well into February.

On the other hand, J&J (JNJ) stocks fell by almost 1%, at 0.91% on average over one month between January and February 2022. The newest data showed that new pharmaceutical research, tools, and other medical devices helped give the company a boost in the fourth quarter.

The S&P 500 has been bearish in recent days, rallying red with day-to-day losses at the opening bell.

Over the last year, biotech stocks on the iShares Biotechnology ETF were down by 12.8%, below the Russell 1000’s return of 21%. Even as the new year closed in, major biotech stocks would slip below their peaks.

Now as the S&P is slipping out of control, biotech stocks look to regain their reputation on the market. Investors are reconsidering whether these stocks are still worth the high risk for the year ahead?

Approval Rates are Dropping

But it’s not just a volatile market that has kept biotech stocks from reclaiming their position among investors. Tightening of approval from drug and pharmaceutical regulators such as the Food and Drug Administration (FDA) has left the lucrative sentiment for biotech stocks erratic.

Approval rates from not just governments, but the general public have also been decreasing, as evidence reveals that some vaccines aren’t as effective as initially proclaimed. When vaccines were first designed to boost immunity against alpha and beta variants, researchers found that newer and more contagious variants have decreased vaccine efficacy.

Although vaccines can perhaps still provide the needed immunity against the novel coronavirus, some are speculating that newer and more infectious variants of the virus will lower the trajectory of not just public support, but also how biotech stocks perform on the market.

J&J Shares a Different Outlook

Vaccine maker, J&J claimed that their vaccine sales will help boost annual revenue by more than 46% in a media release published by The Economic Times on 25 January. Vaccine sales in 2021 brought in more than $1.62 billion at the start of the fourth quarter. Once the company approved booster shots for its initial single-shot dose, sales jumped nearly double, ending the quarter with $2.48 billion in vaccine sales for the year.

Earnings for 2021 were around $2.13 per share, with sales topping more than $42.8 billion for the fourth quarter. The company reported that the coming year will see share earnings reach between $10.40 and $10.60.

While J&J is mostly riding on the success of their vaccines and booster shots which have been proven to still offer around 85% immunity against the Omicron variant, the company is still diversifying their research and product development – focussing on other niche product lines.

But it’s not just companies such as J&J that are looking to improve vaccine efficacy as the ongoing pandemic strains healthcare systems across the world. Some companies are struggling to keep up with demand, and manufacturing has been slowing as the U.S. experiences supply and labor shortages.

Biotech Stocks you should be looking at

Investors are still feeling somewhat reluctant to invest in biotech and biopharma stocks in the coming year. While share returns may have decreased over the last few months, and the market remains volatile, some under-the-radar companies are proving to provide more benefits and guaranteed returns for investors.

Seagen Inc. (SGEN)

Seagen develops therapies and pharmaceuticals that help treat oncology patients. The company has undergone major scrutiny in recent months following its approval of Tvidak in September 2021. Seagen Inc provides a more diversified outlook on the market, with experts citing that stock prices will jump between $40 and $50 in the next few months.

Gritstone Bio (GRTS)

Researchers at Gritstone Bio have been working to develop an almost “second generation” mRNA vaccine, similar to that offered by Pfizer. Over time, investors, and analysts have been keeping a close eye on Gritstone, with the company not only working to develop more highly effective vaccines but also for its research and innovation in the field of oncology.

Seres Therapeutics Inc. (MCRB)

The microbiome therapeutics giant helps develop drugs that work to restore and repair dysbiotic microbiomes. In the third quarter, the company reported revenues of more than $60 million, with year-over-year returns jumping above $120 million. In 2021, Seres underwent a collaboration with Nestle Health Science to boost efforts for ongoing research in therapeutic drug development.

Ascendis Pharma (ASND)

The Danish-based company, Ascendis Pharma has gained a reputation for Skytrofa, a treatment for pediatric growth hormone deficiency. The company has an exciting year lined up, as Ascendis is in to receive increased support and licensing collaboration from leading global biotech brands. Stocks are targeted to reach around $180, with prices currently hovering close to $110.84 per stock as of 25 January

Edgewise Therapeutics Inc. (EWTX)

Investors who are willing to bet less, Edgewise is a biopharma company focussing on treating rare muscle disorders. While some Wall Street analysts have claimed that Edgewise may still be a high-risk stock in its infancy, with stock prices below $15.00 as of January 2021, some expect stock prices to reach more than $30 closer to the fourth quarter.

Takeaway

While opinions over whether biotech and biopharma stocks are double-sided, some still feel that the year ahead will have leading vaccine and pharmaceutical manufacturers stocks slip below their highs of 2021.

Market volatility has raised concern over whether running the high risk with biotech stocks is worth it or not. There’s still a chance that 2022 will see some smaller names in the pharmaceutical industry surpass current predictions.

Investors will still need to consider the risk factor that trails biotech stocks in a volatile market. As the world, and investors hold their breath for the coming year, the development of more effective vaccines and better pharmaceutical research will help not only companies see more support from their regulators, but also help investors see the potential these companies can have for the biotech industry.

Why Pfizer Stock Is Down By 6% Today

Pfizer Stock Drops After Q4 2021 Report

Shares of Pfizer gained downside momentum after the company released its fourth-quarter earnings report. The company reported revenue of $23.84 billion and adjusted earnings of $1.08 per share, missing the analyst estimates on revenue and beating them on earnings.

In 2022, Pfizer expects to report revenue of $98 billion – $102 billion and adjusted earnings of $6.35 – $6.55 per share. Revenue guidance for Comirnaty was raised to $32 billion, while the revenue guidance for Paxlovid was initiated at $22 billion.

It looks that market expected stronger guidance from Pfizer, so traders rushed out of the company’s stock. Shares of other vaccine makers have also found themselves under pressure today. Moderna and BioNTech are down by 7-8%, while Novavax stock is losing about 14% of its value during today’s trading session.

What’s Next For Pfizer Stock?

Analysts believed that Pfizer would report earnings of $6.73 per share in 2022, so the company’s guidance of $6.35 – $6.55 per share missed their estimates. Assuming that Pfizer is able to report earnings at the midpoint of its guidance, the stock is trading at less than 8 forward P/E.

While the stock may look extremely cheap, the key question is whether Pfizer will be able to report such earnings in 2023 and beyond when the world gets back to normal after the coronavirus pandemic.

Analysts are skeptical and expect that Pfizer’s earnings will be moving lower in the next several years. The same worries put pressure on shares of other vaccine makers.

Pfizer is a big and diversified company, so its shares are less volatile compared to other vaccine stocks. However, coronavirus-related revenue is very significant for Pfizer stock, so the trajectory of the pandemic will remain the main driver for the shares in the upcoming months.

Pfizer stock has already declined by roughly 20% from the highs that were reached back in December, but it is not clear whether speculative traders will rush to buy the dip. If the market views Omicron as the last major variant of coronavirus, all vaccine-related stocks, including Pfizer, will have more downside.

For a look at all of today’s economic events, check out our economic calendar.

Pfizer COVID Sales Outlook Disappoints

Dow component Pfizer Inc. (PFE) is trading lower by 4% in Tuesday’s pre-market session after beating Q4 2021 profit estimates and issuing downside fiscal year 2022 guidance. The company posted a profit of $1.08 per-share, $0.21 better than expectations, while revenue missed the mark despite a 104.0% year-over-year increase to $23.84 billion. Traders hit the exits after the guidance warning, which slashed 2% off revenue and 5% off earnings-per-share (EPS).

Disappointing 2022 Sales Outlook

2022 revenue guidance for Comirnaty (COVID vaccine) and Paxlovid (COVID anti-viral) was disappointing, likely triggering the next leg of an intermediate downtrend that just failed a two-week test at 50-day moving average resistance. Comirnaty is now expected to earn $32 billion including recent contracts, while Paxlovid books $22 billion that also includes sales signed or committed as of late January 2022.

Pfizer has other drugs in the pipeline but COVID compounds have moved the stock since the second quarter of 2020. Sadly for shareholders, the vaccine may not achieve the profitability projected by analysts, due to intense political pressure on pricing. In addition, jab uptake declines steadily after the first dose and in younger demographics. Expect greater resistance when officials push fourth doses while, on the flip side, demand for the anti-viral pill could grow exponentially.

Wall Street and Technical Outlook

Wall Street consensus stands at an ‘Overweight’ rating based upon 11 ‘Buy’, 0 ‘Overweight’, 12 ‘Hold’, 1 ‘Underweight’, and 0 ‘Sell’ recommendations. Price targets currently range from a low of $49 to a Street-high $76 while the stock is set to open Tuesday’s session about $3 above the low target. This poor placement highlights growing confusion about long-term earnings potential for Pfizer and rival Moderna Corp. (MRNA) vax plays.

Pfizer rallied above the 1999 high in the 40s in August 2021, completing a massive cup and handle breakout. It hit an all-time high at 61.71 in December and rolled over, entering an intermediate decline that reversed at breakout support in January, The subsequent bounce to 50-day moving average resistance has now failed, generating a test of the low that could yield a breakdown into the 200-day moving average in the upper 40s.In turn, that level could mark a low-risk long-term buying opportunity.

Catch up on the latest price action with our new ETF performance breakdown.

Disclosure: the author held no positions in aforementioned securities at the time of publication.

Why Moderna Stock Is Down By 5% Today

Improved Guidance Failed To Provide Sustainable Support To Moderna Stock

Shares of Moderna gained downside momentum today as traders took some profits off the table after yesterday’s rally.

Moderna has recently reported that it expected to record revenue of $18.5 billion from existing contracts for the delivery of COVID-19 vaccine in 2022. The company may also gain approximately $3.5 billion in revenue in case all options are exercised.

For the full year 2021, the company plans to report sales of $17.5 billion. In addition to the production and development of the coronavirus vaccine, Moderna has 40 programs in development, including 23 programs in ongoing clinical studies.

In its press release, Moderna highlighted its non-coronavirus vaccines and therapeutics, which will be vital for the company’s success when the coronavirus pandemic ends. However, it remains to be seen whether the market is ready to take a look at the post-coronavirus potential of Moderna at a time when the world faces a significant wave of Omicron.

What’s Next For Moderna Stock?

Analysts expect that Moderna will report earnings of $27.85 in 2022, so the stock is trading at roughly 8 forward P/E, which is certainly cheap for the current market environment.

However, the market remains skeptical about Moderna’s ability to maintain its revenue in 2023 and beyond. Other vaccine stocks like Novavax and BioNTech have also underperformed in recent weeks.

It remains to be seen whether Moderna will be able to raise revenue guidance for 2022, so that analysts can re-write their earnings forecasts. These forecasts have been improving in recent weeks, but this improvement failed to provide any support to Moderna stock.

At this point, it looks that Moderna stock needs a multiple expansion to have sustainable upside from current levels. However, it is not clear whether the market is ready to assign a higher price tag for the stock at a time when its 2023 revenues remain a mystery.

For a look at all of today’s economic events, check out our economic calendar.

Why Novavax Stock Is Up By 6% Today

Novavax Stock Rallies After Company Gets Emergency Use Authorization For COVID-19 Vaccine In India

Shares of Novavax gained strong upside momentum after the company received an emergency use authorization for its coronavirus vaccine in India.

Novavax stock has been very volatile in recent months and traded in a wide range between the lows near $120, that were reached back in October, and the highs near $235, that were reached a week ago.

It should be noted that other vaccine stocks like Moderna and BioNTech have also experienced significant volatility. It looks that traders are concerned about sustainability of current revenue and profits.

New anti-viral drugs appeared in the market, and there are hopes that Omicron, which has already became the dominant variant in the U.S. according to CDC, may be less dangerous than Delta. In this environment, market sentiment shifts quickly, which is visible in the recent dynamics of Novavax stock.

What’s Next For Novavax Stock?

Analysts expect that Novavax will report a loss of $12.12 per share in the current year and a profit of $25.71 per share in the next year, so the stock is trading at less than 7 forward P/E.

As I mentioned above, the key problem for Novavax and other vaccine stocks is poor earnings visibility. In addition, earnings estimates for the next year have been steadily declining, which served as an additional bearish catalyst for Novavax stock.

While Novavax is cheaper than its peers, the discount is not dramatic, so it remains to be seen whether speculative traders will choose Novavax stock over the above-mentioned Moderna or BioNTech if they decide to bet on the rebound of the segment.

In recent weeks, we have seen some rush to safety, and bigger, diversified players like AstraZeneca and Pfizer had good stock price dynamics while shares of  non-diversified vaccine makers found themselves under pressure. If this trend continues, shares of Novavax will move lower despite good news from India.

For a look at all of today’s economic events, check out our economic calendar.

HACK: Massive Opportunity Going Into 2022

When you compare the performance of cyber security ETFs to their technology heavyweights like Invesco QQQ ETF (QQQ) or the Technology Select Sector SPDR ETF (XLK), it becomes evident that Wall Street is probably underestimating the potential of the cybersecurity industry in 2022. For the sake of this comparison, I considered the ETFMG Prime Cyber Security ETF (HACK) and iShares Cybersecurity and Tech ETF (IHAK) as shown below, but there are others too.

https://static.seekingalpha.com/uploads/2021/12/27/49663886-1640601244360989.png

Source: tradingview

The above charts show that both the two cybersecurity ETFs have underperformed their technology peers by more than 20%, despite holding stocks that are active in the fight against network malware and computer viruses, similarly to biotechs like BioNTech (NASDAQ:BNTX) and Moderna (NASDAQ:MRNA) producing cures to address the coronavirus threat.

Now, antivirus companies have been around for years, even decades, but the problem is that the threat level has increased exponentially as from the end of 2020 when Microsoft’s (NASDAQ:MSFT) was hacked through the supply chains attack when hackers made use of SolarWinds(SWI)monitoring software. Moreover, as shown by the high degree of sophistication of the recent ransomware attacks impacting colonial pipeline where millions of dollars of ransom money had to be paid to attackers, there is the involvement of bad actors at the nation-state level.

This is synonymous with aggression against the U.S., thus prompting the Biden administration to come up with a Cybersecurity executive order in May literally “forcing” federal agencies to boost IT defenses. As a result, public institutions have started to increase related expenses.

As for private institutions, they are also at a higher degree of risk due to the rapid adoption of the cloud, with workloads now also residing on employees’ laptops at home, making them more vulnerable to hacking as they are less protected by centralized corporate firewalls. Hence, there are multiple threat vectors facing CIOs, with many large enterprises reassessing their approach to cybersecurity altogether.

Hence relative underperformance in 2021 and an escalated threat landscape have created a massive opportunity for well-positioned cyber security vendors with the right products and proposition. For this matter, companies that come to mind are Cisco (NASDAQ: CSCO), Palo Alto (NASDAQ:PANW), and Fortinet (NASDAQ:FTNT), with their sophisticated zero trust protection (“ZTP”) mechanism. ZTP, in a way, resolves the problem which cannot be solved by the more traditional perimeter fencing security where the corporation is protected assuming it to be functioning within four walls. This is far from being the case in the current decentralized/WFH environment. Exploring further, HACK holdings also include companies that provide IT security for a wide variety of purposes including desktop as well as their web infrastructures.

https://static.seekingalpha.com/uploads/2021/12/27/49663886-16406012442883983.png

Source: etfmg.com

Thinking aloud, unless you are prepared to invest in these individual stocks which implies tracking their performance on a regular basis, HACK provides you with the ability to invest in more than one, namely through an ETF. Another advantage is that it tracks the Prime Cyber Defense Index (PCYBERNR), which provides a benchmark for investors interested in tracking companies actively involved in providing cyber security technology and services. Its holdings also include companies involved in security protocols applied to private and public networks and mobile devices in order to provide integrity of data protection.

Along the same lines, the fund managers review holdings on a quarterly basis for eligibility purposes, with the weights (percentage of assets occupied by a holding) being reset accordingly.

Finally, nearly two years after the advent of Covid, many companies are still in the process of transforming their operations to optimize on the cloud paradigm and should subsequently increasingly focus on the security aspect as a lesser portion of IT workloads remains in corporate datacenters. For this purpose, HACK’s holdings should profit as part of the broader cyber security industry over the next ten years as the market size which was $183.34 billion in 2020 reaches $539.78 billion in 2030.

Calculating a target share price for the end of 2022, based on an appreciation of just 20%, HACK should reach $73.5-$74. This uptrend should however witness a lot of volatility as most cybersecurity names are considered as growth stocks and should be adversely impacted as inflation pressures continue to prevail in the first half of 2022.

 

Why Moderna Stock Is Down By 4% Today

Moderna Stock Keeps Moving Lower Despite Worries Over The Spread Of Omicron

Shares of Moderna gained additional downside momentum today after Merck‘s COVID-19 drug molnupiravir received an emergency use authorization from FDA. Earlier, Moderna stock faced pressure when Pfizer‘s Paxolovid got an emergency use authorization from FDA.

The market’s logic is simple. Anti-coronavirus pills will serve as an additional tool in the fight against the pandemic. If the danger from coronavirus decreases thanks to new drugs, demand for vaccines will fall over time, which will be bearish for Moderna.

In addition, the competition in the vaccine space is intensifying. Novavax vaccine has recently recevied an emergency use listing (EUL) from the World Health Organization. EUL will allow Novavax to participate in the COVAX, which aims to distribute vaccines to less developed countries.

What’s Next For Moderna Stock?

Currently, analysts expect that Moderna will report earnings of $25.89 per share in 2021 and earnings of $26.47 per share in 2022, so the stock is trading at roughly 9 forward P/E, which is cheap for the current market environment.

However, earnings visibility remains Moderna’s key problem. While it is obvious that the company will enjoy strong demand for its vaccine for 2022, the picture for 2023 is less clear. At first glance, it looks that demand should stay strong as developed countries are already rushing to introduce boosters due to the spread of Omicron while developing countries have not completed their initial vaccination programs.

However, it is not clear whether the company will be able to deliver strong profits after the pandemic ends. These worries have already put significant pressure on Moderna stock, so news about new drugs or alternative vaccines serve as bearish catalysts for Moderna shares. It remains to be seen whether speculative traders will rush to buy Moderna stock after the recent pullback or wait for more data on Omicron to adjust their estimates.

For a look at all of today’s economic events, check out our economic calendar.

Is The Omicron Variant Setting Up For A Repeat of 2020 For Gold Prices – What’s Next?

Gold prices exploded higher after Fed chair Jay Powell signalled that the Omicron variant of the coronavirus could slow the U.S economic recovery and prolong global supply chain disruptions that are fuelling unstoppable inflation.

The remarks by the Fed chief are his first on the state of the economy since the World Health Organization dubbed a new strain of the coronavirus as “a variant of concern”.

Even before Powell spoke, the precious metal ticked higher amid comments from Moderna CEO Stephane Bancel.

Bancel raised alarm bells as he declared that existing vaccines would be much less effective at tackling Omicron than earlier strains of coronavirus. He also warned it would take months for pharmaceutical companies to manufacture new variant-specific vaccines at scale.

Gold’s price action over the past week is beginning to resemble the identical trend seen during the first wave of the pandemic in April 2020.

What comes next will be dictated by what scientists discover about the new COVID-19 variant, including how resistant it is to vaccines and how more transmissible it is than the delta variant.

Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions:

For a look at all of today’s economic events, check out our economic calendar.

Speculative Positioning Ahead of Fridays Omicron Dump

Saxo Bank publishes weekly Commitment of Traders reports (COT) covering leveraged fund positions in commodities, bonds and stock index futures. For IMM currency futures and the VIX, we use the broader measure called non-commercial.

Futures positions and changes made by hedge funds across commodities, forex and financials up until last Tuesday, November 23. While a lot of water has flowed under the bridge since last Tuesday, it is nevertheless interesting, not least considering the report encapsulated the market reaction to last weeks renomination of Fed chair Powell which helped send both treasury yields and the dollar sharply higher, as well as the oil market reaction to the coordinated SPR release announcement. Finally, it also gives us an idea about the level of positioning ahead of Friday’s omicron related sell off.

The below summary highlights futures positions and changes made by hedge funds across commodities, forex and financials up until last Tuesday, November 23. The report normally released on Friday’s was delayed due to last weeks Federal holidays, and while a lot of water has flowed under the bridge, its nevertheless interesting.

Not least considering the report encapsulated the market reaction to last weeks renomination of Fed chair Powell which helped send both treasury yields and the dollar sharply higher, as well as the oil market reaction to the coordinated SPR release announcement. Also it gives a good idea about how funds and speculators were positioned ahead of the sharp risk off to the new omicron virus variant.

Commodities

The commodity sector saw sizable shift out of energy and metals into the agriculture sector where all 13 futures contracts covered in this update saw net buying. During the week the energy sector lost 2.1% while precious metals dropped 4.3% after gold broke below key support at $1830. A 1.5% rise in copper was not enough to convince speculators who cut their net long by 20%. Most noticeable however was the strong buying seen across the agriculture sector, with strong demand and weather worries more than offsetting the headwind caused by the stronger dollar.

Energy

Crude oil, both Brent and WTI, were sold ahead of the coordinated SPR release announcement last Tuesday. The combined net long dropped by 14k lots to a one-year low at 514.6k lots. The loss of price momentum during the past few months has, despite an overriding bullish sentiment in the market, been driving the reduction, and following Friday’s 10% price collapse these traders have been rewarded for sticking to the signals the market was sending instead of listening to bullish price forecasts. Hedge funds are not “married” to their positions hence their better ability to respond to changes in the technical and/or fundamental outlook.

Metals

Having increase bullish gold bets by 65k lots during the previous two weeks, funds were forced to make 45k lots reduction last week in response to the Powell renomination sending gold sharply lower and below support in the $1830-35 area. Speculators have been whipsawed by the price action in recent weeks and it helps to explain why they are in no mood to reenter in size despite renewed support from Covid19 angst. Silver’s 6% sell off during the week helped trigger a 17% reduction in the net long to 30k lots while in copper a small price increase was not enough to stem the slide in net length.

Following seven weeks of selling, the net length has dropped by 64% to 19.5k lots, a 13-week low. Months of rangebound behaviour has reduced investor focus, and until we see High Grade Copper make an attempt to break its current $4.2 to $4.5 range, the level of positioning is likely to remain muted.

Agriculture

More concerned with other drivers such as weather, strong demand and supply chain disruptions helped trigger across the board buying of all 13 futures contracts split into grains, softs and livestock. The combined long held across these contracts reached a six-month high at 1.13 million lots, representing a nominal value of $43.5 billion. Buying was broad with the top three being corn, sugar and soybeans. Elsewhere the net long in Arabica coffee reached a fresh five-year high at 58k lots and KCB wheat a four-year high at 65.6k lots.

UPDATES from today’s Market Quick Take

Crude oil (OILUKJAN22 & OILUSJAN21) turned sharply lower in early European trading as the mood across markets soured on renewed concerns about the omicron virus strain. This after Moderna’s head told the Financial Times that existing vaccines will be less effective at tackling omicron and it may take months before variant-specific jabs are available at scale.

The news come days before the OPEC+ group of producers meet to discuss production levels for January. Brent crude oil already heading for its biggest monthly loss since March 2020 trades below its 200-day moving average for the first time in a year, a sign that more weakness may lie ahead, thereby raising the prospect for OPEC+ deciding to pause or perhaps even make a temporary production cut.

Gold (XAUUSD) received a muted bid overnight in response to the omicron virus comments from the head of Moderna (see oil section above). In addition, comments from Fed chair Powell helped reduced 2022 rate expectations from three to two after he said the omicron virus posed risks to both sides of the central bank’s mandate for stable prices and maximum employment.

Despite this development together with softer Treasury yields and a weaker dollar, gold continues to struggle attracting a safe-haven bid. Silver (XAGUSD) looks even worse having dropped to a six-week low on weakness spilling over from industrial metals.

Forex

Broad dollar buying following Fed chair Powell’s renomination helped drive a 20% increase in the greenback long against ten IMM currency futures and the Dollar index to $25.4 billion and near a two-year high. All the currencies tracked in this saw net selling with the biggest contributors being euro (12.6k lots), CAD (11.8k) and JPY (4.1). The net short on the latter reached 97.2k lots or the equivalent of $10.6 billion, a short of this magnitude helps explain the strength of the sell off in USDJPY since last Thursday when safe haven demand picked up as the omicron news began to spread.

Despite hitting a 16-month low last week the euro short only reached 12.6k lots, a far cry from the -114k lots reached during the panic month of February last year when the pair briefly traded below €1.08.

What is the Commitments of Traders report?

The COT reports are issued by the U.S. Commodity Futures Trading Commission (CFTC) and the ICE Exchange Europe for Brent crude oil and gas oil. They are released every Friday after the U.S. close with data from the week ending the previous Tuesday. They break down the open interest in futures markets into different groups of users depending on the asset class.

Commodities: Producer/Merchant/Processor/User, Swap dealers, Managed Money and other

Financials: Dealer/Intermediary; Asset Manager/Institutional; Leveraged Funds and other

Forex: A broad breakdown between commercial and non-commercial (speculators)

The reasons why we focus primarily on the behavior of the highlighted groups are:

  • They are likely to have tight stops and no underlying exposure that is being hedged
  • This makes them most reactive to changes in fundamental or technical price developments
  • It provides views about major trends but also helps to decipher when a reversal is looming

Why Moderna Stock Is Up By 23% Today

Moderna Stock Rallies As Traders Focus On The New COVID-19 Variant

Shares of Moderna gained strong upside momentum on worries about the new variant of coronavirus.

S&P 500 is down by almost 2% today, but vaccine stocks are rallying. BioNTech is up by 19%, Pfizer gains 6% while Novavax is up by 10%.

The emergence of the new variant will likely boost demand for vaccines as countries rush to vaccinate their residents or to provide boosters for them. While it remains to be seen whether existing vaccines work well against the new variant, the world has little options to choose from, so countries will likely be forced to bet on increased vaccine adoption.

What’s Next For Moderna Stock?

Moderna stock received strong support today as traders were trying to find a way to protect their funds against the risks posed by the new variant of the virus. In this environment, vaccine stocks served as safe-haven assets.

Analysts expect that Moderna will report earnings of $25.76 per share in 2021 and $26.21 per share in 2022, so the stock is trading at roughly 13 forward P/E. As usual, the key question is whether Moderna will be able to enjoy strong demand for its vaccine in the next few years.

Back at the beginning of November, Moderna stock made an attempt to settle below the $210 level but managed to gain upside momentum and is currently trying to settle above the $340 level.

The near-term dynamics of Moderna stock will depend on the developments on the coronavirus front. In case the new variant is a real threat, the stock will have a good chance to gain additional upside momentum.

In fact, Moderna stock may get additional support even in the scenario when the current panic turns out to be unjustified. The emergence of a new variant with many mutations has already highlighted major risks, so demand for vaccines will likely increase in any scenario.

For a look at all of today’s economic events, check out our economic calendar.