Pfizer Close to Long-Term Buying Opportunity

Pfizer Inc. (PFE) and BioNTech SE (BNTX) released positive data on their COVID-19 vaccine for ages 5 to 11 on Monday but the stock is losing ground with the broad market, adding to a five-week slide that’s already relinquished more than 16%.  The decline is roughly tracking the slow rollover of U.S. Delta infections and another slowdown in daily vaccinations. Last week’s FDA advisory meeting didn’t help, with the group declining to recommend broad-based booster shots.

Pulling Back from August Breakout

The pharmaceutical giant has gained 17% so far in 2021 despite the latest downturn, with a good portion of selling pressure generated by a rotation out of pandemic plays. However, the last six months have proved how difficult it will be to transition from pandemic to endemic, especially with billions around the world still unvaccinated. Taken together with Pfizer’s bullish breakout pattern, the current decline should offer a low risk buying opportunity.

Approval for ages 5 to 11 will open eligibility to more than 50 million new vaccinations in the EU and USA. As the business partners noted on Monday, “Pfizer and BioNTech plan to share these data with the FDA, European Medicines Agency (EMA) and other regulators as soon as possible. For the United States, the companies expect to include the data in a near-term submission for Emergency Use Authorization (EUA) as they continue to accumulate the safety and efficacy data required to file for full FDA approval in this age group.”

Wall Street and Technical Outlook

Wall Street consensus is surprisingly lukewarm, with a ‘Hold’ rating based upon 4 ‘Buy’, 15 ‘Hold’, and 1 ‘Underweight’ recommendation. No analysts are recommending that shareholders close positions. Price targets currently range from a low of $39 to a Street-high $61 while the stock is set to open Monday’s session on top of the median $44 target. While this placement indicates that Pfizer is fairly-valued, it’s also likely that analysts are underestimating the vaccine’s long-term revenue potential.

Pfizer topped out at 44.05 in 2018 and sold off to a six-year low during 2020’s pandemic decline. A volatile recovery finally reached the prior peak in August 2021, setting off an immediate breakout that posted an all-time high at 51.86 less than three weeks later. The pullback into September is now approaching a zone of strong support near 40, raising odds for a buy-the-dip wave that confirms the breakout and sets the stage for strong 2022 upside.

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

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

Why Pfizer Stock Is Moving Higher Today

Pfizer Stock Rebounds From Multi-Week Lows

Shares of Pfizer gained upside momentum and moved away from multi-week lows after reports indicated that the company planned to apply for U.S. authorization of its coronavirus vaccine for kids aged five and under in November.

Meanwhile, Pfizer’s vaccine was recommended as a booster shot for people over the age of 50 in the UK. It was also recommended for all vulnerable people.

The stock has been under pressure in recent weeks as traders took profits after the major rally which took the stock to new all-time high levels. However, the stock found support in the $44 – $45 range and is currently trying to rebound as traders prepare for potential positive catalysts.

What’s Next For Pfizer Stock?

A recent article in Lancet, written by two departing FDA officials and scientists from WHO, argued that booster shots were not required for the general population. This article has put some short-term pressure on vaccine stocks, but they quickly managed to recover as traders focused on the expanding market for vaccines.

The outlook for vaccine demand in 2022 is exceptional since most developed countries will likely introduce booster shots, less-developed countries have a long way to complete their initial vaccination process while vaccines can be also introduced to kids and teenagers.

Currently, analysts expect that Pfizer will report earnings of $4.09 per share in 2021 and $3.6 per share in 2022, so the stock is trading at less than 13 forward P/E. While analysts expect that earnings will decline in 2022 compared to 2021, these estimates may change as demand for coronavirus vaccines will likely be stronger than originally expected.

In this light, Pfizer stock may attract value-oriented investors and speculative traders who are willing to buy the stock after the significant pullback due to its attractive valuation and potential upside catalysts.

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

S&P 500 Snaps Losing Streak With Tax Hikes, Inflation Data on Horizon

The Dow Jones Industrial Average also advanced, but the Nasdaq Composite Index ended lower.

Investors favored value over growth, with stocks set to benefit most from a resurging economy enjoying the biggest percentage gains.

“There are probably not a lot of positive surprises coming this month,” said Liz Young, head of investment strategy at SoFi in New York. “We’re having another period of volatility where I think that rotation could go back to cyclicals and the reopened trade, as the 10-year bond rate slowly grinds higher through the end of the year.”

Market participants are focused on the likely passage of U.S. President Joe Biden’s $3.5 trillion budget package, which is expected to include a proposed corporate tax rate hike to 26.5% from 21%.

Goldman Sachs analysts see the corporate tax rate increasing to 25% and the passage of about half of a proposed increase to tax rates on foreign income, which they estimate would reduce S&P 500 earnings by 5% in 2022.

The Labor Department is due to release its consumer price index data on Tuesday, which could shed further light on the current inflation wave and whether it is as transitory as the Fed insists.

“I don’t see inflation settling back down under 2% where it was pre-pandemic,” Young added. “Even if some of those transitory forces weaken, we will still stay at a higher rate than we were before.”

Other key indicators due this week include retail sales and consumer sentiment, which could illuminate how much the demand boom driven by economic re-engagement has been dampened by the highly contagious COVID-19 Delta variant.

The Dow Jones Industrial Average rose 261.91 points, or 0.76%, to 34,869.63, the S&P 500 gained 10.15 points, or 0.23%, at 4,468.73 and the Nasdaq Composite dropped 9.91 points, or 0.07%, to 15,105.58.

Of the 11 major sectors in the S&P 500, healthcare suffered the largest percentage loss, while energy, buoyed by rising crude prices was the biggest gainer.

Shares of vaccine makers Moderna and Pfizer Inc sank 6.6% and 2.2%, respectively, after experts said COVID booster shots are not widely needed.

Coinbase Global Inc announced plans to raise about $1.5 billion through a debt offering aimed at funding product development and potential acquisitions. The cryptocurrency exchanges shares slid 2.2%. Inc dipped 1.2% as rival Freshworks Inc’s regulatory filing indicated that the business engagement and customer engagement software company is aiming for a nearly $9 billion valuation in it U.S. debut.

Advancing issues outnumbered declining ones on the NYSE by a 1.60-to-1 ratio; on Nasdaq, a 1.02-to-1 ratio favored advancers.

The S&P 500 posted 12 new 52-week highs and one new low; the Nasdaq Composite recorded 53 new highs and 71 new lows.

Volume on U.S. exchanges was 10.30 billion shares, compared with the 9.29 billion average over the last 20 trading days.

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

(Reporting by Stephen Culp; Additional reporting by Krystal Hu in New York and Ambar Warrick in Bengaluru; Editing by Richard Chang)

Sweetwood Capital Monthly Market Insights

August was mostly positive for risky assets of the major developed economies with lower volatility in the background. On the other hand, safe assets such as investment grade bonds, were trading lower, with the benchmark 10-year Treasury yield starting the month below 1.20% and ending it above 1.30%.

Despite the fast spreading of the Delta variant and the vaccines’ declining efficiency against infection, global data continues to reflect optimism: consumption spending remains high, and we are witnessing a shift from goods to services lately. Two signals confirming that the recovery is on the right path. Also, since the Pfizer/BioNTech Covid-19 vaccine received FDA’s full approval, reopening is expected to accelerate further.

Two huge plans advanced in the US Congress during the summer: the infrastructure bill of $1 trillion, the largest federal investment into infrastructure projects ever made, and the reconciliation bill of $3.5 trillion, which is a social plan that Democrats will try to pass without Republicans’ support. This huge federal cash deployment will be highly supportive to sectors such as infrastructure, electric vehicles, cybersecurity and 5G.

Last week, the Jackson Hole Symposium, the annual Fed members summit in Wyoming, was held virtually, for the second consecutive year. This meeting focused on inflation and unemployment. After Chairman Jerome Powell stated that the economic recovery from the pandemic has exceeded expectations, he confirmed that the time has come to tighten the Fed’s purchase program. Therefore, tapering is now highly likely before the end of the year, while a rate hike is still not expected before 2023.

According to Powell’s statement, the supply chain disruptions (shortages and bottlenecks) alongside wage increases are still the main source of inflation. The spike in some prices is impacting only goods and services affected by the pandemic yet, and this trend tends to disappear with time (for example used cars prices). As for wages, the increase is welcome because it supports a rising standard of living, and it is still consistent with the long-term inflation target.

After the summer break, September will see the return of Central Banks’ meetings. From the Fed we expect more details regarding the upcoming tapering: when exactly, what, how much etc. Of course, a huge focus will be put on the August jobs report, that needs to confirm the “substantial progress” made in the labor market in July. September will also mark the end of the enhanced unemployment benefits from Covid-19, and so we may well have a wave of people returning to work in the US. The ECB’s meeting may be focused on inflation, since the last data released this week showed an unexpected 3% inflation rate in Eurozone, the highest level since 2011.

News from China was less dramatic this month, but the momentum has not yet returned to Chinese stocks. Some investors are starting to think that the new regulatory measures are now coming to an end, but the vast majority still await concrete positive moves in order to build back a bullish sentiment and bring capital back to the world’s second largest economy.

In terms of earnings, it was another strong quarter: 87% of S&P 500 companies reported positive surprises for EPS (earnings per share) and revenue. However, in terms of future guidance, it was split: about half the companies warned of slowing growth for the coming quarters but that’s to be expected after the boom experienced in some sectors during the pandemic.

While closing a seventh straight winning month, it’s hard to remain in the skeptical zone. Also, since the Fed remains very transparent and tapering has been highly predictable for quite some time now, we don’t expect any “tapering tantrum”, as we experienced in 2013. We continue to see stocks more appealing than bonds, and the fact that major financial institutions recently increased their target for US equity indexes comforts us in our overweighting choice.

As always, risk-management combined with rigorous sector and geographical diversification will remain key factors for investment performance.

You are more than welcome to contact us to discuss our investment views or financial markets generally.

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

Zoom Dead Money So Far in 2021

Zoom Video Communications Inc. (ZM) reports fiscal Q1 2022 earnings after Monday’s closing bell, with analysts looking for a profit of $1.16 per-share on $990.2 million in revenue. If met, earnings-per-share (EPS) will mark a 26% profit increase compared to the same quarter last year. The virtual meeting provider has beaten estimates every quarter since coming public in April 2019, posting a 191.4% year-over-year revenue increase in the quarter ending May 31st.

Growing Competition in a Post-Pandemic World

The company continues to diversify its product catalog after 2020’s historic uptrend, driven by pandemic lockdowns around the world. Meanwhile, multiple competitors are offering alternatives to the Zoom platform at the same time that lockdowns have drawn huge political opposition, despite the rise of the Delta variant. It’s been a race against time for Zoom, seeking to replace lost income to maintain its rich valuation and high stock price.

Morgan Stanley analyst Meta Marshall upgraded Zoom to ‘Overweight’ last week, noting “we think that enterprise momentum, combined with margin headwinds dissipating, creates a positive setup into FQ2. While revenue expectations are not low, we believe they are doable, which combined with upcoming Zoomtopia and FY23 guidance in a couple of quarters, leaves us more optimistic on the stock at current valuation”.

Wall Street and Technical Outlook

Wall Street consensus has improved in the last three months, now standing at an ‘Overweight’ rating based upon 14 ‘Buy’, 1 ‘Overweight’, 11 ‘Hold’, 1 ‘Underweight’, and 1 ‘Sell’ recommendation. Price targets currently range from a low of $242 to a Street-high $525 while the stock ended Friday’s session more than $75 below the median $416 target. This low placement highlights investor apathy toward pandemic beneficiaries, most recently illustrated by Peloton Interactive Inc.’s (PTON) steep post-earnings slide.

Zoom broke out above the 2009 high at 107.34 in February 2020, entering an historic uptrend that hit an all-time high at 588.84 in October, just weeks before Pfizer Inc. (PFE) and BioNTech SE (BNTX) announced the success of their vaccine. The stock has posted a long series of lower highs and lower lows since that time, crisscrossing the 200-day moving average and 50% rally retracement repeatedly since March.  Accumulation fell to an 8-month low last week, highlighting slow-motion profit-taking that could easily stretch into the fourth quarter.

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

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

Oil Up 3% on Stronger Demand Outlook; Mexican Oil Rig Outage

Brent crude oil futures were up $2.25, or 3.3%, at $71.00 a barrel by 2:20 p.m. ET (17:20 GMT) while U.S. West Texas Intermediate (WTI) gained $1.92, or 2.9%, to $67.56.

Last week, both benchmarks notched their biggest weekly losses in more than nine months. On Monday, both jumped more than 5%, boosted by a weaker dollar.

A resurgent pandemic has fueled health system concerns; however, “economically harmful containment measures seem rather unlikely”, said Julius Baer analyst Norbert Rucker, citing the effectiveness of vaccines.

On Monday, the U.S. Food and Drug Administration issued full approval for the Pfizer/BioNTech two-dose vaccine, having authorized it for emergency use last December. Officials hope to convince unvaccinated Americans the shot is safe and effective.

Analysts said China’s apparent success in fighting the spread of the Delta variant of the coronavirus also boosted demand sentiment, with no cases of locally transmitted infections in the latest data.

“Concerns are easing that we will not see a global shutdown due to the Delta variant,” said Gary Cunningham, director of market research at Tradition Energy in Stamford, Connecticut.

Also supporting oil prices was a fire on an oil platform off Mexico on Sunday that has cut state-run Pemex’s oil production by about 25% since then. Five workers died and the fire halted 421,000 barrels per day of production.

Prices of heavy sour crude oil grades are rising on the U.S. Gulf Coast, traders said, as the market braces for a disruption of supplies from Mexico.

“The market is getting a tailwind from the PEMEX fire, which has greenlighted this rally,” said Bob Yawger, director of energy futures at Mizuho in New York.

Still, Yawger cautioned that the market could reverse course if U.S. government data on Wednesday shows gasoline inventories increased. Analysts polled by Reuters expect gasoline inventories to fall, but Yawger expects a gain, which could signal a demand lull.

Data from trade group the American Petroleum Institute is expected Tuesday at 4:30 p.m. ET (20:30 GMT), with official data from the Energy Information Administration released on Wednesday at 10:30 a.m. ET (14:30 GMT).

The U.S. Department of Energy on Monday said it would sell up to 20 million barrels of crude from the Strategic Petroleum Reserve (SPR) oil stocks to comply with legislation, with deliveries to take place between Oct. 1 and Dec. 15.

Meanwhile, Indian refiners’ crude throughput in July bounced to its highest in three months as fuel demand rebounded and buoyed prices.

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

(Additional reporting by Jessica Jaganathan in Singapore and Ahmad Ghaddar in LondonEditing by John Stonestreet, David Goodman, David Gregorio and Jonathan Oatis)

Dollar Slips Further as Oil Jumps, Commodity Currencies Gain

Risk appetite in global markets strengthened after the U.S. Food and Drug Administration on Monday granted full approval to the COVID-19 vaccine developed by Pfizer and BioNTech in a move that could accelerate U.S. inoculations.

A bounce in China’s technology sector also contributed to risk-on sentiment that helped boost the Canadian, Australian and New Zealand dollars.

“The euro, Canada and Aussie currencies made new lows for the year last week, and so the dollar is consolidating and its upside momentum has stalled,” said Marc Chandler, a managing director at Bannockburn Global Forex.

The dollar index, which measures the greenback against a basket of six currencies, fell 0.091% to 92.903.

The euro was up 0.08% at $1.1752, while the yen traded down 0.01% at $109.6700.

Rising COVID-19 infections caused by the highly contagious Delta variant have fueled concerns about the recovery from the pandemic. But markets have largely overlooked that this week, with analysts citing thin liquidity as a factor driving apparent swings in risk appetite.

Market attention is focused on the Federal Reserve’s Jackson Hole conference on Friday, at which some investors expect Fed Chair Jerome Powell to hint on a possible timeline for tapering the U.S. central bank’s bond-buying monetary stimulus.

“We think investors will want to wait to hear on this subject from Jerome Powell on Friday before pushing ahead with another major round of risk-buying, dollar-selling,” ING strategists wrote in a note to clients.

COVID-19 case counts are also being watched closely, particularly in China and New Zealand. Outbreaks in China appear to be coming under control while in New Zealand, where monetary policy was put on hold last week due to measures to contain the Delta variant, the lockdown remains in effect.

The Australian dollar, viewed as a liquid proxy for risk appetite, was up 0.7% at $0.7264.

The New Zealand dollar was up 0.9% at a one-week high of $0.6954, boosted by comments from the Reserve Bank of New Zealand’s assistant governor, who said policymakers had actively considered raising rates last week.

The RBNZ left rates on hold at a record low 0.25% but flagged a tightening before the end of the year.

The Norwegian currency was up 0.9% against the euro, with the pair changing hands at 10.3796, while the Canadian dollar was up 0.4% against the U.S. dollar.

Oil prices extended a rally on Monday, driven by a bullish demand outlook after the full approval of the Pfizer-BioNTech vaccine and Mexico suffered a large production outage.

Brent crude oil futures rose 3.2% to $70.94 a barrel.

The rise in oil prices has washed out some of the excessive bearishness towards Canada, Chandler said.

The Canadian dollar hit eight-month lows last week. Out of the major trading currencies, Canada is among the most sensitive to the equity market, Chandler said.

Elsewhere, bitcoin edged back below $50,000, which was breached for the first time since May on Monday. The digital currency was down 2.2% at about $48,456.

(Reporting by Elizabeth HowcroftEditing by David Goodman and Bernadette Baum)

Today’s Market Wrap Up and a Glimpse Into Tuesday

Stocks are on a roll, with all three of the major indices closing in the green. The tech-heavy Nasdaq even clinched a fresh all-time high, closing at 14,942, while the Dow Jones Industrial Average and S&P 500 also advanced.

Investors were in a cheery mood after the FDA placed its full stamp of approval on Pfizer’s COVID-19 vaccine. Shares of the pharmaceutical giant climbed approximately 2.5% higher on the day. Now that the drug, which Pfizer made alongside BioNTech, has received the blessing of regulators, Americans who have been holding out might be swayed to get jabbed.

Stock index futures are continuing their upbeat performance in the after-hours market on Monday evening as investors breathe a sigh of relief about the vaccine. The Dow, Nasdaq and S&P 500 futures are all flashing green.

Stocks to Watch

  • Ride-share companies Uber and Lyft were resilient in the face of a setback in a California court. A judge decided that Prop 22, which is a ballot initiative in the state designed to keep gig economy workers as independent contractors rather than employees, is unconstitutional. Companies including Uber, Lyft and DoorDash poured hundreds of millions of dollars into Prop 22, the decision on which they are now expected to appeal.
  • Tech giant Microsoft saw its shares rally to a new record after revealing plans to hike the price on some Office 365 subscriptions next year. Wall Street analysts reacted positively to the new pricing model, suggesting that Microsoft could see a bump in revenue as a result.
  • Shares of Palo Alto Networks are up 10% in after-hours trading on the heels of the tech company’s quarterly results. Palo Alto Networks beat Wall Street estimates on the top and bottom lines as businesses begin to refresh their hardware. The extended-hour gains are notable considering the stock’s year-to-date gains fell below 6% prior to Monday.

Look Ahead

With no sign of the markets slowing down, investors will be looking to see if stocks will extend their gains yet again on Tuesday. Fed officials are a wildcard that could derail the market optimism as they prepare for the annual Jackson Hole symposium, which will be held virtually this year. Fed Chairman Jerome Powell’s keynote address will come on Friday.

AMC Shares Soar 7% as Silver Lining Emerges

Shares of AMC Entertainment rallied nearly 7% on Monday, giving investors something to cheer about right out of the gate. The stock is inching closer to the USD 40 level once again after trading below the USD 30 threshold in early August.

Retail investors have been drawn to AMC largely based on its meme-stock status, which is tied to sentiment on social media. Nevertheless, AMC’s fundamentals appear to be strengthening in their own right.

Mass Vaccinations in Sight

AMC’s stock could be benefiting directly from a positive development out of the pharmaceutical sector. The U.S. FDA has given the green light to a COVID-19 vaccine made by Pfizer and BioNTech. The drug, which they are calling Comirnaty, will be made available to people as young as 16 years old.

Even though millions of Americans have already been inoculated, the FDA stamp of approval is expected to instill confidence that the drug is safe. With mass vaccinations in sight, the economy stands to benefit, including the entertainment industry and movie chains such as AMC.

In fact, AMC CEO Adam Aron on the company’s Q2 earnings call made a link between the strength of the balance sheet and vaccination levels. He stated,

“Vaccination rates have climbed quickly in 2021. And the counterintuitive result of this new Delta variant is that vaccinations likely will continue to rise, and vaccination increasing is very important for AMC and for the movie theater industry generally.”

David vs. Goliath

AMC Entertainment was founded more than a century ago in Kansas City, Miss. Now the company must transform itself to compete in the era of streaming entertainment in which on-demand platforms designed for mobile devices and computers have taken market share.

AMC’s Aron appears to be the person for the job. He is confronting the threat that movie studios pose by bypassing the theater experience in favor of releasing films to content streaming platforms first.

Movie studios and theaters have long had a love/hate relationship given the dependence that the cinema companies have on studios for their very survival. Since the pandemic hit, some major movie studios inked deals with movie chains such as AMC to soften the blow with a bigger piece of the profit pie as movies became available on demand.

In the interim, another way that AMC’s Aron is fighting back is by embracing the cryptocurrency revolution, with plans to accept bitcoin as a payment method for tickets and popcorn by the end of the year.

Stocks on the Radar: FDA Expected to Grant Full Approval of Pfizer-BioNTech Vaccine on Monday

Shares of coronavirus disease vaccine maker Pfizer and its partner BioNTech could rise on Monday following a New York Times report that the U.S. Food and Drug Administration (FDA) is aiming to give full approval to its COVID-19 vaccine.

Regulators were aiming to complete the process by Friday, but were still working through a “substantial amount of paperwork and negotiation with the company,” the Times said, citing people familiar with the planning who were not authorized to speak publicly about it.

The agency declined to comment, according to Reuters. It had set an unofficial deadline for approval of around Labor Day on September 6, the report said.

US Approval of COVID-19 Shots Could Boost Vaccination Numbers, Fauci Says

Top U.S. infectious disease expert Dr. Anthony Fauci said on July 30 he hopes regulators as soon as next month could start granting full approval for the COVID-19 vaccines, a move he said could spur unvaccinated Americans to get the shots.

Full approval by the FDA could push more Americans to get the COVID-19 vaccine as it might reduce their fears about the safety of the shot and make local officials more comfortable about implementing vaccine mandates, Fauci, director of the National Institute of Allergy and Infectious Diseases and chief medical adviser to the White House, said in an interview with Reuters.

In addition, formal FDA approval would give physicians the ability to prescribe a third dose of the vaccine to people with weakened immune systems on an off-label basis, Fauci said.

US Government Approves Booster Shots

Federal health officials said earlier in the week that a third dose of the COVID-19 shots developed by Moderna Inc. and Pfizer Inc will be available in mid-September for Americans who have been fully vaccinated for at least eight months. They cited waning protection as the reason for a booster shot.

“The available data make very clear that protection against SARS-CoV-2 infection begins to decrease over time following the initial doses of vaccination, and in association with the dominance of the delta variant, we are starting to see evidence of reduced protection against mild and moderate disease,” the officials said in a statement.

Stock Market Investors Have Been Downplaying Impact of Delta-Variant Surge on US Economy

Although August has been the worst month in 2021 for new coronavirus cases since February according to USA Today, and a Reuters analysis found that there were more than 1,000 COVID-19 deaths on Tuesday, the major U.S. stock indexes remain within striking distance of its record highs. This indicates that investors have full confidence that a surge in vaccinations will prevent a curtailing of the U.S. economic recovery.

Nonetheless, global investors have grown cautious on stocks as concerns about the delta variant of COVID-19 threaten to dent the worldwide economic recovery.

The U.S. economy is not yet out of the woods, however. Economists at Goldman Sachs lowered their third-quarter U.S. growth forecast to 5.5% from 9%, though they raised their expectations for the next four quarters.

“The impact of the delta variant on growth and inflation is proving to be somewhat larger than we expected,” said the Goldman economists, led by David Mericle. Their revised forecast implies 2021 growth of 6% on a full-year basis versus 6.4% previously, and 2022 growth of 4.5% versus 4.4% previously.

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

Why Pfizer Stock Rallied To New Highs Today

Pfizer Stock Gains Ground Amid Reports That Its Booster Shot Is Effective

Shares of Pfizer gained additional upside momentum and moved to new all-time high levels after a Reuters report indicated that the third dose of its vaccine was 86% effective in people aged over 60. The study was done by an Israeli healthcare provider.

Yesterday, Pfizer stock and shares of other vaccine makers got a boost after The New York Times reported that U.S. was ready to announce that most Americans would need a booster shot of coronavirus vaccine, so good news are coming day after day for the company.

It is already obvious that developed countries will introduce booster shots, which will increase demand for vaccines and may boost their prices. Not surprisingly, Pfizer shares move higher as traders rush to increase positions in shares of vaccine makers.

What’s Next For Pfizer Stock?

Analysts estimates for Pfizer have moved higher in recent days as it became evident that vaccine makers will be able to sell booster shots, and demand for vaccines will increase.

Currently, analysts expect that Pfizer will report earnings of $4.12 per share in 2021 and $3.59 per share in 2022, so the stock is trading at less than 15 forward P/E which is cheap for the current market environment.

It should be noted that earnings estimates for 2022 have a good chance to move higher in the upcoming weeks as analysts will begin to model stronger demand for vaccines. This demand will be driven by demand for booster shots from developed countries, as well as demand for initial shots from developing countries where vaccination rates remain at low levels.

In this light, Pfizer shares have a good chance to gain additional upside momentum as the spread of the Delta variant of coronavirus remains a major problem, and demand for vaccines will stay at high levels for many months to come.

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

Pfizer, Moderna Seen Reaping Billions from COVID-19 Vaccine Booster Market

For several months, the companies have said they expect that fully inoculated people will need an extra dose of their vaccines to maintain protection over time and to fend off new coronavirus variants.

Now a growing list of governments, including Chile, Germany and Israel, have decided to offer booster doses to older citizens or people with weak immune systems in the face of the fast-spreading Delta variant.

Late on Thursday, the U.S. Food and Drug Administration authorized a booster dose of vaccines from Pfizer Inc and Moderna Inc for people with compromised immune systems.

Pfizer, along with its German partner BioNTech, and Moderna have together locked up over $60 billion in sales of the shots just in 2021 and 2022. The agreements include supply of the initial two doses of their vaccines as well as billions of dollars in potential boosters for wealthy nations.

Going forward, analysts have forecast revenue of over $6.6 billion for the Pfizer/BioNTech shot and $7.6 billion for Moderna in 2023, mostly from booster sales. They eventually see the annual market settling at around $5 billion or higher, with additional drugmakers competing for those sales.

The vaccine makers say that evidence of waning antibody levels in vaccinated people after six months, as well as an increasing rate of breakthrough infections in countries hit by the Delta variant, support the need for booster shots.

Some early data suggests that the Moderna vaccine, which delivers a higher dose at the outset, may be more durable than Pfizer’s shot, but more research is needed to determine whether that is influenced by the age or underlying health of the people vaccinated.

As a result, it is far from clear how many people will need boosters, and how often. The profit potential of booster shots may be limited by the number of competitors who enter the market. In addition, some scientists question whether there is enough evidence that boosters are needed, particularly for younger, healthy people. The World Health Organization has asked governments to hold off on booster shots until more people worldwide receive their initial doses.

“We don’t know what the market forces will be,” Moderna President Stephen Hoge said in an interview last week. “At some point, this will become a more traditional market – we’ll look at what are the populations at risk, what value are we creating, and what are the number of products that serve that value. That will ultimately impact price.”

Pfizer declined to comment for the story. During the company’s second-quarter earnings call, executives said they believe a third dose will be necessary 6 to 8 months after vaccination, and regularly afterward.


If regular COVID-19 boosters are needed among the general population, the market would most resemble the flu shot business, which distributes more than 600 million doses per year. Four competitors split the U.S. flu market, which is the most lucrative and accounts for around half the global revenue, according to Dave Ross, an executive at CSL’s flu vaccine unit Seqirus.

Flu vaccination rates in developed countries have settled at around 50% of the population, and COVID boosters would likely follow a similar pattern if approved widely, said Atlantic Equities analyst Steve Chesney.

Flu shots cost around $18 to $25 a dose, according to U.S. government data and competition has kept price increases in check, with producers raising prices 4 or 5 percent in 2021.

Pfizer and Moderna may have greater pricing power for their boosters, at least at the outset, until competitors arrive. Pfizer initially charged $19.50 per dose for its vaccine in the United States and 19.50 euros for the European Union, but has already raised those prices 24% and 25%, respectively, in subsequent supply deals.

AstraZeneca Plc and Johnson & Johnson are both gathering additional data on boosters of their vaccines. Novavax, Curevac, and Sanofi could also potentially be used as boosters, though their vaccines have yet to receive any regulatory authorization.

“A lot of these firms aren’t even in the market yet. I think within a year’s time, all these companies will have booster strategies,” said Morningstar analyst Damien Conover, who covers Pfizer.

Mizuho Securities analyst Vamil Divan expects at least 5 players in the COVID-19 booster market within a few years.

There’s still a lot of uncertainty around how boosters would be rolled out in the United States. Still, it is possible or even likely that people will be boosted with different vaccines than they were originally vaccinated with. The National Institute of Allergy and Infectious Diseases is already testing mixed boosting, and other countries that have used so-called mix and match vaccination have not had problems with that strategy.

One factor that could curb prices is if the U.S. government continues paying for most or all of the shots administered in the country, rather than leave it in the hands of private health insurers. In that scenario, the government would still be negotiating prices directly with vaccine makers, and could use its buying power to stave off price increases.

Bijan Salehizadeh, managing director at healthcare investment firm Navimed Capital, said the U.S. government is likely going to want to keep paying in order to keep vaccination rates high and prevent new COVID surges, particularly if a Democratic administration is still in power.

“It’s going to be paid for until the virus disappears or mutates to be less virulent,” Salehizadeh said.

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

(Reporting by Michael Erman, Additional reporting by Julie Steenhuysen in Chicago and Carl O’Donnell in New York; Editing by Michele Gershberg, Nick Zieminski and Keith Weir)

Pfizer Shares Hit Record High With COVID-19 Vaccine Stocks on a Tear

Pfizer shares were last up 4.9% at $48.25, climbing as high as $48.57 during the session. The stock’s previous intraday high was $47.44, reached on April 12, 1999.

The percentage gain was the stock’s biggest one-day rise since Nov. 9, when Pfizer released positive data for its COVID-19 vaccine.

“I think they are finally getting credit for the vaccine,” said Jeff Jonas, a portfolio manager at Gabelli Funds, which owns Pfizer shares.

While investors had treated the vaccine before as “a one-time cash infusion … it is really going to be a durable business, unfortunately,” Jonas said, adding that Pfizer should be able to leverage the vaccine’s technology for use against other types of disease as well.

Pfizer’s share gains come as those of another coronavirus vaccine maker, Moderna Inc, have also been on a tear.

While Moderna’s shares were down 4% on Tuesday, they have soared some 78% since mid July, when S&P Dow Jones Indices announced it was adding the biotech company’s stock to the benchmark S&P 500 index.

U.S.-traded shares of Pfizer’s partner on the vaccine, Germany’s BioNTech, were down over 5% on Tuesday, but have climbed about 30% this month.

Shares of Novavax, which last week delayed its timeline for its COVID-19 vaccine, were up 11% on Tuesday.

The rapid spread of the Delta variant of the coronavirus has pushed cases and hospitalizations in the United States to a six-month high.

“The Delta variant has scared a lot of people into getting inoculated,” said Peter Tuz, president of Chase Investment Counsel and an investor in Pfizer.

Pfizer in late July raised its 2021 sales forecast for its COVID-19 vaccine by 29% to $33.5 billion.

Ashtyn Evans, a healthcare analyst at Edward Jones, said Pfizer will be able to use the cash flow from the vaccine “for both internal research and development and for acquisitions to strengthen their pipeline.”

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

(Additional reporting by Noel Randewich in San Francisco; Reporting by Lewis Krauskopf; Editing by Marguerita Choy)

BioNTech Says Has Supplied More Than 1 Billion COVID-19 Vaccine Doses so Far

The supply tally, up from more than 700 million doses announced by the biotech firm in June, compares with AstraZeneca saying late last month that it and manufacturing partner Serum Institute of India had supplied a billion doses to 170 countries at the time.

Based on delivery contracts for over 2.2 billion doses so far, BioNTech said in a statement it expects to accrue 15.9 billion euros ($18.7 billion) in revenue from the vaccine this year, up from a May forecast of 12.4 billion euros.

That includes sales, milestone payments from partners and a share of gross profit in its partners’ territories, the company added.

Pfizer late last month raised its forecast for its share of 2021 vaccine sales to $33.5 billion.

BioNTech added on Monday that it and Pfizer believe a third dose, following the established two-shot regimen, “has the potential to preserve the highest levels of protective efficacy against all currently tested variants, including Delta”, underscoring similar remarks made by its partner.

Still, it reiterated plans to start testing a vaccine adjusted to the highly infectious Delta variant of the virus on humans this month, part of a “comprehensive strategy to address variants, should the need arise in the future”.

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

($1 = 0.8509 euros)

(Reporting by Ludwig Burger; Editing by Caroline Copley, Douglas Busvine and Chizu Nomiyama)


Why Pfizer Stock Is Testing New Highs Today

Pfizer Raised Prices For COVID-19 Vaccines In EU

Shares of Pfizer gained strong upside momentum and moved to new highs after reports indicated that Pfizer and Moderna raised prices of their coronavirus vaccines in the latest contracts with EU.

According to Financial Times, the price for a Pfizer shot was increased from 15.50 euros to 19.50 euros, an increase of roughly 25%. Moderna’s price grew from 19 euros to $25.50 per shot.

Not surprisingly, the market quickly reacted to the new deal which will increase Pfizer’s revenue. This deal shows that Pfizer has pricing power as demand for coronavirus vaccines stays strong. At the same time, Pfizer has already supplied the initial doses of its COVID-19 vaccines at lower prices, so the firm should not face allegations that it is trying to profit from the pandemic.

What’s Next For Pfizer Stock?

Pfizer has recently reported its second-quarter earnings. The company reported revenue of $19 billion and GAAP earnings of $0.98 per share, easily beating analyst estimates on both earnings and revenue.

Pfizer has increased its full-year 2021 revenue guidance from $70.5 billion – $72.5 billion to $78 billion – $80 billion due to the strength of its COVID-19 vaccine business.

The company also stated that it was confident that a booster dose of its vaccine would protect people against the Delta variant of coronavirus. Most countries have not decided whether they will use booster shots of coronavirus vaccines, but the likelihood of this scenario is increasing as the spread of the Delta variant has led to an increase in the number of new coronavirus cases in countries with successful mass vaccination programs.

Solid pricing power and strong demand for coronavirus vaccines will continue to serve as bullish catalysts for Pfizer shares in the upcoming weeks. The stock is trading at about 13 forward P/E which is cheap for the current market environment, and the company’s shares have decent chances to continue their upside move.

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

Pfizer Raises 2021 COVID-19 Vaccine Sales Forecast to $33.5 Billion

The company said the raised sales forecast of the vaccine is based on signed deals for 2.1 billion doses this year, and that it could increase if it signs additional contracts. Pfizer and BioNTech expect to produce 3 billion doses of the vaccine this year.

Pfizer gained a head start in December with the first U.S. emergency authorization of a COVID-19 vaccine, and has since jumped ahead of rivals that have faced manufacturing hurdles. Johnson & Johnson’s vaccine has also been under scrutiny over safety concerns.

J&J last week estimated full-year COVID-19 vaccine sales of $2.5 billion, while Moderna has forecast $19.2 billion.

Pfizer has said it believes a third “booster” dose of its vaccine will be needed in the future, which could help it bring in more sales in 2022. The company said on Wednesday it could file for an emergency use authorization for a potential booster dose as early as August.

Top infectious disease official Anthony Fauci said on Sunday that Americans who are immune compromised may end up needing booster shots as the United States deals with increasing cases from the Delta variant of the coronavirus.

The United States purchased 200 million more doses of the Pfizer/BioNTech vaccine last week to help with pediatric vaccination as well as possible booster shots – if they are needed.

Pfizer’s previous forecast in May of $26 billion was based on deals signed for 1.6 billion doses. Wall Street was broadly in line with that forecast at $28.51 billion, according to nine analysts polled by Refinitiv.

Expenses and profit from the vaccine are split 50-50 between Pfizer and BioNTech.

(Reporting by Manas Mishra in Bengaluru; Editing by Sriraj Kalluvila)

Johnson & Johnson Completes Breakout Pattern

Dow component Johnson & Johnson (JNJ) is trading higher by 1% in Wednesday’s pre-market session after beating Q2 2021 top and bottom line estimates and raising fiscal year 2021 guidance. The pharmaceutical and home health care giant earned $2.48 per-share during the quarter, $0.19 better than expectations, while revenue rose an impressive 27.1% year-over-year to $23.31 billion, nearly $800 million higher than consensus.

Fighting Off Bad Press

The company dealt with a wave of misinformation about the Janssen vaccine and potential for side effects in the first half of the year. The negative news flow has damped sales, with just 13 million doses administered to date, compared to around 330 million for Pfizer Inc. (PFE) and Moderna Corp. (MRNA).  Even so, quarterly product sales grew 10% and these controversies aren’t the tipping point for the $447 billion mega cap with 2.63 billion shares outstanding.

Johnson & Johnson faces a bigger challenge with ongoing talcum powder and opiate litigation.  It’s just finalized a $26 billion opioid settlement with more than 40 states and may attempt to “rope off” potential talc exposure into a separate entity that can be taken through bankruptcy proceedings. However, that could be a hard sell for U.S. courts flipping through the balance sheet of the 12th largest publicly traded corporation.

Wall Street and Technical Outlook

Wall Street consensus hasn’t budged in 2021 despite front page headlines, with an ‘Overweight’ rating based upon 12 ‘Buy’, 3 ‘Overweight’, 4 ‘Hold’, and 1 ‘Underweight’ recommendation. Price targets currently range from a low of $160 to a Street-high $203 while the stock is set to open Wednesday’s session about $18 below the median $188 target. Strong price action so far in 2021 suggests that gains will stretch into the median target by year’s end.

Johnson & Johnson broke out above February 2020 resistance near 150 in January 2021, entering a strong uptrend that posted an all-time high at 173.65 a few weeks later. Price action since that time has carved the outline of a bullish ascending triangle pattern that forecasts a measured move target in the 190s following a breakout. However, that event could take time to unfold because selling pressure in the last seven weeks has weakened an otherwise solid technical outlook.

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

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

Today’s Market Wrap Up and a Glimpse Into Friday

Inflation worries finally caught up with investors, triggering a sell-off on Wall Street. The S&P 500 shed nearly 1% in a stark reversal from Wednesday when the broader market index reached a new all-time high. Investors are starting to question the sustainability of the economic recovery due to too few workers for a surplus of jobs coupled with supply chain constraints.

The Dow Jones Industrial Average shed more than 250 points, while the Nasdaq was down over 100 points. No sector was left unscathed, from technology to the banks, though the three major indices closed off their worst levels of the day.

Stocks to Watch

Wells Fargo was trending on Twitter after revealing that it would shutter its personal lines of credit product, leaving consumers outraged. Not only will customers lose access to the product but the move could affect their credit scores.

Bank customers were previously able to access between USD 3K and USD 100K and tended to use the credit line for everything from consolidating credit card debt to home repairs to preventing overdraft fees. Wells Fargo is set to report its quarterly earnings on July 14.

Pfizer is seeking regulatory approval to increase the dose of its COVID-19 vaccine in an attempt to thwart the Delta variant that has been spreading. The pharmaceutical company is looking to do so in the next month and has approached the FDA for the green light. Pfizer is planning clinical trials next month.

Levi Strauss was more than 2% higher in after-hours trading after reporting its Q2 results.  The company’s earnings and revenue surpassed Wall Street estimates, with sales poised to revisit pre-COVID-19 levels in Q3. The apparel company raised its full-year outlook as long as the pandemic remains under control.

On the meme stock front, AMC Entertainment bounced back, adding 6% after four straight days of declines. GameStop similarly found its stride and avoided another day in the doldrums. The winner on the meme-stock front was Virgin Galactic, whose value ballooned by 17% to close above USD 52 per share ahead of Richard Branson’s upcoming spaceflight this weekend.

Economic Outlook

Wells Fargo economists have revised their second-quarter and full-year 2021 GDP forecasts lower. They now expect GDP to expand at 9.2% in Q2 and 7% for the year, down from previous forecasts of 10.9% for the quarter and 7.3% for 2021. The economists cited “softer than expected data performances at quarter’s end.”

Top Scientists Question the Need for COVID-19 Booster Shots

By Julie Steenhuysen and Kate Kelland

In interviews with Reuters, more than a dozen influential infectious disease and vaccine development experts said there is growing evidence that a first round of global vaccinations may offer enduring protection against the coronavirus and its most worrisome variants discovered to date.

Some of these scientists expressed concern that public expectations around COVID-19 boosters are being set by pharmaceutical executives rather than health specialists, although many agreed that preparing for such a need as a precaution was prudent.

They fear a push by wealthy nations for repeat vaccination as early as this year will deepen the divide with poorer countries that are struggling to buy vaccines and may take years to inoculate their citizens even once.

“We don’t see the data yet that would inform a decision about whether or not booster doses are needed,” said Kate O’Brien, director of the Department of Immunization, Vaccines and Biologicals at the World Health Organization (WHO).

O’Brien said the WHO is forming a panel of experts to assess all variant and vaccine efficacy data and recommend changes to vaccination programs as needed.

Pfizer Inc Chief Executive Albert Bourla has said people will “likely” need a booster dose of the company’s vaccine every 12 months – similar to an annual flu shot – to maintain high levels of immunity against the original SARS-CoV-2 virus and its variants.

“There is zero, and I mean zero, evidence to suggest that that is the case,” countered Dr. Tom Frieden, former director of the U.S. Centers for Disease Control and Prevention.

“It’s completely inappropriate to say that we’re likely to need an annual booster, because we have no idea what the likelihood of that is,” Frieden, who now leads the global public health initiative Resolve to Save Lives, said of Pfizer’s assertions on boosters.

Pfizer, responding to the criticism, said it expects a need for boosters while the virus is still circulating widely. That could change once the pandemic is more firmly under control, a company spokeswoman said.

Moderna Inc CEO Stephane Bancel aims to produce a vaccine by the fall that targets a variant first identified in South Africa and expects regular boosters will be needed.

The United States is preparing to have such doses on hand for Americans, while the European Union, Britain and Israel have ordered new supplies of COVID-19 vaccines to deploy as protective boosters.

Some health experts, including Richard Hatchett, chief executive of the Coalition for Epidemic Preparedness Innovations (CEPI) that has funded many vaccine projects, say vaccine makers are right to plan ahead for boosters given the uncertainty over what will be needed in the long run.

Governments can then decide for themselves whether to buy the products, he said.


Pfizer and German partner BioNTech SE have so far found that their shot remains more than 91% effective for six months after people received their second dose, compared with nearly 95% demonstrated in their clinical trial. The companies will track how robust the protection remains over time.

Dr. William Gruber, Pfizer’s senior vice president of vaccine clinical research and development, told Reuters earlier this month the prediction for yearly boosters was based on “a little evidence” of a decline in immunity over those six months.

Pfizer expects the COVID-19 vaccine to be a major revenue contributor for years, and has forecast sales of $26 billion from the shot in 2021. Global spending on COVID-19 vaccines and booster shots could total $157 billion through 2025, according to U.S. health data firm IQVIA Holdings.

Moderna President Stephen Hoge expects boosters will be needed to keep immunity levels high, due in part to vaccine hesitancy, as an estimated 30% of the U.S. population may not agree to be vaccinated. As long as the virus is circulating widely, people at high risk of severe illness may need to boost their immune protection, Hoge said.

“All governments are in conversations with (Moderna) and other companies about boosters,” he said.


Late last year, scientists were optimistic that highly effective vaccines could quickly curb the global pandemic that has battered economies and killed more than 3.4 million people.

Those hopes dimmed by February with evidence that mutant versions of the virus might evade protection offered by vaccines. Laboratory studies showed that the South African variant could produce six to eight-fold reductions in antibody levels among people vaccinated with the Pfizer or Moderna vaccines.

Clinical trial data also showed that vaccines from AstraZeneca Plc, Johnson & Johnson and Novavax Inc were less effective at preventing infections in South Africa, where the variant is widespread.

These studies spurred drug companies to start testing booster doses of their vaccines and to develop shots that target specific variants of the virus.

However, more recent research suggests that the Moderna and Pfizer/BioNTech vaccines produce high levels of protective antibodies to create a “cushion effect” against the known variants, said Dr. Anthony Fauci, head of the National Institutes of Allergy and Infectious Diseases (NIAID) and a top White House adviser.

And antibodies – which block the coronavirus from attaching to human cells – do not tell the whole story. Several studies suggest that T cells – a type of white blood cell that can target and destroy already infected cells – may help prevent severe COVID-19 and hospitalization.

NIAID researchers found that T cells in the blood of people who recovered from the original virus could still fight off infections caused by the concerning variants found in the UK, South Africa and Brazil.

“It’s quite possible” that boosters would not be needed, Fauci told Reuters. “It is conceivable that the variants will not be as much a problem with a really good vaccine as we might have anticipated.”

Nevertheless, health authorities in the United States, Britain and Europe are assuring their populations that a new round of shots will be available if needed, with many nations still desperate for vaccine supplies.

“It’s a huge concern that … wealthy countries would begin administering booster doses and further constraining supply of people’s first dose of vaccine,” said Rajeev Venkayya, head of global vaccines for Takeda Pharmaceutical Co.

Dr. Monica Gandhi, an infectious disease doctor at the University of California, San Francisco, said ultimately, decisions on whether boosters will be needed “will best be made by public health experts, rather than CEOs of a company who may benefit financially.”

(Reporting by Julie Steenhuysen in Chicago and Kate Kelland in London; Additional reporting by Michael Erman in Maplewood, N.J.; Editing by Michele Gershberg and Bill Berkrot)

Pfizer Bets on COVID-19 Vaccine Demand for Years, Sees Sales of $26 Billion in 2021

By Manas Mishra and Michael Erman

Revenue from the vaccine – developed with German partner BioNTech SE – is expected to account for more than one third of Pfizer’s full-year sales this year.

The forecast is based on already signed contracts for 1.6 billion vaccine doses to be delivered this year. The company said it expects to sign more deals for this year and is in supply talks with several countries for 2022 and beyond.

“Based on what we’ve seen, we believe that a durable demand for our COVID-19 vaccine – similar to that of the flu vaccines – is a likely outcome,” Chief Executive Albert Bourla said.

The two-shot vaccine was Pfizer’s top-selling product in the first quarter. Expenses and profit from the vaccine are split 50-50 between Pfizer and BioNTech.

Given persistent infections globally and ongoing discussions with governments, Mizuho analyst Vamil Divan said the 2021 forecast could increase further and also spill over to latter years.

Pfizer and BioNTech aim to produce up to 2.5 billion COVID-19 vaccine doses this year, 900 million of which are not yet included in the New York-based drugmaker’s sales forecast.

If Pfizer sells that number of doses at similar prices, the vaccine’s sales in 2021 could be more than 50% above the projected $26 billion.

Moderna In has forecast $18.4 billion in 2021 sales of its similar COVID-19 vaccine.

Pfizer has said it expects to profit from the vaccine, while some drugmakers including Johnson & Johnson have said their vaccine will be sold on a not-for-profit basis until the end of the pandemic.

Pfizer aims to manufacture at least 3 billion doses of the vaccine next year. It generated $3.5 billion in revenue in the first quarter, exceeding analysts’ estimates of $3.28 billion, according to IBES data from Refinitiv.

Total revenue for the quarter of $14.6 billion, topped analyst forecasts of $13.5 billion.

Pfizer could use the vaccine profit to invest in research and development of other treatments and on deals to spur future growth, said Edward Jones analyst Ashtyn Evans.

The company already said it is boosting R&D spending to fuel drug discovery using the messenger RNA technology in the COVID-19 vaccine. The company is developing two flu vaccines that are expected to enter clinical trials in the third quarter.

Pfizer shares were about flat in early trading.

(Reporting by Manas Mishra in Bengaluru and Michael Erman in Maplewood, N.J; Editing by Arun Koyyur and Bill Berkrot)