Why One Analyst Sees Big Upside in This COVID-19 Vaccine Stock

Health and Healthcare

Published: December 15, 2020 11:21 am

BioNTech S.E. (NASDAQ: BNTX) was in the spotlight on Tuesday after it received a sizable price target hike from one key analyst. This German biotechnology company has been at the forefront in the fight against COVID-19 as it, along with Pfizer Inc. (NYSE: PFE), recently received approval for a coronavirus vaccine from the U.S. Food and Drug Administration (FDA).

The FDA authorized BioNTech and Pfizer’s mRNA COVID-19 vaccine, BNT162b2, and the Center for Disease Control (CDC) voted to recommend use. These companies have multiple supply agreements for 570 million doses. Considering this, one analyst decided to hike its target price.

Canaccord Genuity reiterated a Buy rating for BioNTech and raised its price target to $130 from $115, implying upside of 20% from the most recent closing price of $108.27.

In terms of the supply agreements, there are 570 million doses committed, plus an option on 600 million more. Here’s the breakdown: 200 million doses for the European Union, with an option for 100 million; 30 million doses for the United Kingdom; 100 million for the United States, with an option for 500 million; 120 million doses for Japan; 10 million for Hong Kong/Macau; and 110 million undisclosed in nine countries for 2020 to 2021 delivery.

As it stands now, Pfizer and BioNTech expect to manufacture 50 million doses in 2020 and up to 1.3 billion doses in 2021. The manufacturing guidance, however, was not increased, even following the acquisition of the Marbug facility, though management is working toward this contributing meaningfully in the second half of 2021.

The FDA panel voted that the “benefits outweigh the risk” in a 17-to-4 decision for BNT162b2 in use in 16+ year olds, in an Emergency Use Authorization (EUA). The CDC voted in favor of the EUA as well, and also that the initial supply would go to health care workers and nursing home residents.

BioNTech stock traded up about 3% on Tuesday to $111.11, in a 52-week range of $27.73 to $131.00. The consensus price target is $115.28.

Pfizer stock was down about 2%, at $38.38 in a 52-week range of $26.45 to $43.08. The consensus price target is $42.00.

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