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2 Vaccine Stocks to Buy on Concerns About the Omicron Covid Variant

Because the emergence of a new, highly virulent coronavirus strain called omicron poses a significant threat globally, COVID-19 vaccine markers are expected to again attract significant investor attention. While researchers are still trying to understand the efficacy of existing vaccines concerning the new variant, we think prominent vaccine stocks Pfizer (PFE) and BioNTech (BNTX) could rally in the coming months. Read on.

Based on the data submitted to the TAG-VE, the WHO last week recognized the COVID-19 omicron variant as a concern. The data indicate that omicron contains several new qualities that might affect how it behaves. After a few patients began exhibiting unusual symptoms that differ slightly from those associated with the Delta variant, the WHO warned that this variant poses a "very high" global risk and could have “severe consequences for some areas.”

Omicron contains more than 30 mutations to its spike protein, and the effectiveness of existing vaccines may be lower. Scientists in South Africa are now exploring omicron. Also, vaccine makers have already started working on boosters to address the omicron variant, and a new omicron-specific vaccine could be ready in the near term.

Given this backdrop, we believe fundamentally sound vaccine stocks Pfizer Inc. (PFE) and BioNTech SE (BNTX) could be solid bets now.

Click here to checkout our Healthcare Sector Report for 2021

Pfizer Inc. (PFE)

New York City-based PFE is a global biopharmaceutical company that discovers, develops, manufactures, and distributes medicines and vaccines in a wide range of therapeutic areas. The company markets its products under the Eliquis, Xtandi, Medrol, Premarin family, and various other brands. The company is primarily known for its blockbuster COVID-19 vaccine under the Prevnar 13/Prevenar 13 (pediatric/adult) and the Pfizer-BioNTech COVID-19 vaccine brands.

This month, PFE and BNTX announced that the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) issued a positive opinion based on the scientific evidence shared by PFE and BNTX on the administration of the companies' COVID-19 vaccines COMIRNATY in children five to under 12 years of age.

PFE's revenues increased 134.4% year-over-year to $24.09 billion in its third fiscal quarter, ended October 3, 2021. The company's adjusted income grew 132.7% from its  year-ago value to $7.69 billion. Its adjusted EPS rose 127.1% from the prior-year quarter to $1.34. Also, the company's revenues under the Oncology segment increased 11.7% year-over-year to $3.09 billion.

Analysts expect PFE's revenue for the fiscal year 2022 to be $786.01 billion, representing 6.4% growth year-over-year. The company has an impressive earnings surprise history; it beat the consensus EPS estimates in three of the trailing four quarters. Its EPS is expected to grow 16.2% next year. The stock has gained 61.2% in price over the past nine months.

PFE's strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which equates to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.

Also, the stock has an A grade for Growth and a B grade for Value and Quality. We have also graded PFE for Stability, Sentiment, and Momentum. Click here to access all PFE's ratings.

PFE is ranked #10 of 196 stocks in the Medical – Pharmaceuticals industry.

BioNTech SE (BNTX)

Headquartered in Mainz, Germany, BNTX is a biotechnology company that develops and commercializes immunotherapies for cancer and other infectious diseases. The company offers products using different scientific approaches and technology platforms, diagnostic products, and drug discovery services for other therapeutic areas, including allergies and autoimmune disorders.

This month, BNTX and PFE announced that the U.S. Food and Drug Administration (FDA) had expanded the emergency use authorization (EUA) of a booster dose of the PFE – BNTX COVID-19 vaccine to include individuals 18 years of age and older. BNTX believes that this booster dose has the potential to maintain a high level of protection against tested variants, including Delta.

During the third quarter, ended September 30, 2021, BNTX's total revenues increased 8,918.2% year-over-year to €6.09 billion ($6.87 billion). The company's operating income came in at €4.72 billion ($5.33 billion), compared to a€186.4 million ($210.23 million) operating loss in the prior-year quarter. Its profit for the period amounted to €3.21 billion ($3.62 billion), compared to a €210 million ($236.84 million) loss in the third quarter of 2020. And BNTX’s EPS was €12.35 ($13.93), versus a €0.88 ($0.99) loss per share in the year-ago quarter.

BNTX's revenue is expected to increase 3,240.8% year-over-year to $19.71 billion in its fiscal year 2021. The company has an impressive earnings surprise history; it beat the consensus EPS estimates in each of the trailing four quarters. Its EPS is expected to increase 59,171.4% in the current year. The stock has gained 219.2% in price over the past nine months and 231.6% over the past year.

BNTX's POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to a Buy in our proprietary rating system. The stock also has a B grade for Growth, Value, and Quality.

In addition to the POWR Rating grades I have just highlighted, one can see BNTX’s ratings for Stability, Momentum, and Sentiment here. The stock is ranked #20 of 476 stocks in the Biotech industry.

Click here to checkout our Healthcare Sector Report for 2021

PFE shares were trading at $53.43 per share on Tuesday morning, up $1.03 (+1.97%). Year-to-date, PFE has gained 50.83%, versus a 23.40% rise in the benchmark S&P 500 index during the same period.

About the Author: Priyanka Mandal

Priyanka is a passionate investment analyst and financial journalist. After earning a master's degree in economics, her interest in financial markets motivated her to begin her career in investment research.


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