People worldwide are becoming less threatened by omicron, the latest coronavirus variant. This variant spreads faster but is less dangerous. News about Delta is rare. This created a false sense of security. On the stock market, Moderna (MRNA) is trading lower. It is also creating value for investors who missed the last big run-up.
Last week, the CDC endorsed Moderna’s vaccine. Pfizer’s vaccine also has the same FDA approval. This will bode well for both firms. Health organizations will likely recommend a semi-annual or annual booster shot. This will prevent protect people from a more dangerous variant of Covid, should it emerge again.
MRNA stock is especially compelling. The stock trades at a P/E of around 10 times. Its forward P/E is in the single digit. Since vaccines sales will rise steadily in the coming quarters, this valuation is too low.
Novavax (NVAX) is trading at a tenth of Moderna’s market capitalization. Novavax is selling millions of doses to countries including Japan, Israel, and the U.K. The protein-based product could demonstrate strong protection against the virus at high safety levels. This would lead to stronger orders in the next year.
Investors should consider MRNA and NVAX in the pharmaceutical drug stock portfolio.
