Moderna’s (NASDAQ:MRNA) stock recent fall raises the question of whether some pharma stocks have gotten ahead of themselves. And strictly on a price-to-earnings basis, that might look to be the case.
But most of these bio-tech companies don’t seem quite so pricey based on another measure, their price-to-earnings growth, or PEG, ratios. Because of the healthy growth many are expected to post in 2021, this rally can still continue.
But even though their PEG ratios are generally more modest now, these pharma stocks are still far from bin bargains. But both those high P/Es and relatively gentler PEG ratios may come down as earnings estimates don’t yet reflect the recovery that’s expected next year.
Many companies will beat expectations as the year progresses and the fight against coronavirus takes hold. While sales were tepid for pharma retailers for most of last year, MRNA and Pfizer done great this year.
If I am right shares of Moderna — along with those of many other vaccine developers — might not be as overdressed as they look.
The shares of the US biotech company Moderna saw the first profit-taking on Tuesday. The stock had previously risen to almost $180, the highest level ever. This seven-fold surge happened after a cup and holder pattern was created. This pattern started back in July.
The stock was able to recover on Monday morning before renewed pressure came after it became known that Merck & Co had sold its direct shares.
The US pharmaceutical company Merck & Co has sold its directly held shares in the corona vaccine developer Moderna. Merck sold its direct investment in the first half of the fourth quarter, the company announced in Kenilworth on Wednesday.
The participation was created between 2015 and 2018 as part of a research cooperation and was gradually expanded, it said. Mainly because of the 2020 share rally, Merck expects to make a small profit on the sale in the fourth quarter. The companies continue to cooperate in cancer research, and Merck continues to have an indirect stake in Moderna through venture capital funds. No further details were given.
In addition, the direct competitor BioNTech scored with an initial approval on Wednesday. In the UK, the company has received the green light for its corona vaccine. The decision is still to come in the EU and the USA – just like with Moderna. Moderna recently became the first company to apply for approval in the EU.