It’s a mixed day for the stock market, but it’s not a good day for vaccine stocks. Across the board, these names are getting sold.
Pfizer (NYSE:PFE) is down 2%, while Moderna (NASDAQ:MRNA) is off 9%. Novavax (NASDAQ:NVAX) is hitting new 52-week lows of $27.35, although it’s off the session low and down 7.5% on Monday. BioNTech (NASDAQ:BNTX) is also down, suffering a blow similar to Moderna and down over 8.5%.
In short, it’s a lousy day to be in vaccine stocks. The catalyst? The White House and more specifically, President Joe Biden.
While Biden has championed the vaccines, his recent comments on 60 Minutes are creating quite a stir. Naturally, we’re not here to dissect the political implications — just the action it’s inflicting on the stock market.
On 60 Minutes, President Biden said:
The pandemic is over. We still have a problem with Covid. We’re still doing a lot of work on it. But the pandemic is over. If you notice, no one’s wearing masks. Everybody seems to be in pretty good shape, and so I think it’s changing, and I think [the Detroit auto show resuming after three years] is a perfect example of it.
What to Make of Vaccine Stocks
Of course, everyone is clinging to the first sentence — “the pandemic is over” — and not paying much attention to the context in which it was stated. But again, that doesn’t matter for the purpose of our discussion. However, it does lead us to wonder what may be next for the vaccine stocks.
That’s not only because there is waning momentum in case counts and deaths, but also in demand for vaccines. Many people feel fine without getting another booster shot and consider themselves armed well enough against Covid-19. That mentality is having an impact on these stocks.
Pfizer is likely the best positioned of the group to ride out the storm — and you’re seeing that in the stock’s performance today. It’s got a portfolio of different business segments that can help shoulder the load with the vaccine revenue set to diminish in 2023.
Others, like Novavax, aren’t in as good of a position and again, we can see that in the stock’s price action. This is also the most volatile stock of the group.
Moderna is somewhere in between. It is an enormous beneficiary of the vaccine, but revenue is forecast to fall 50% in FY 2023 as sales dwindle down. The hope is that the vaccine was able to drive enough revenue and cash flow to fuel new projects for years to come. That really goes for all of these companies.
At the end of the day, the vaccine was a big positive catalyst. Now though, these companies will have to work against tough comps and declining growth for a while.
On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
