A saying on Wall Street is that the market hates uncertainty, and unfortunately that looks to be playing out in global stock markets currently. In historically quick fashion, the vast majority of stocks are hitting bottom – most have already hit 52-week lows and many are hitting multi-year lows. It’s a different story with certain food and healthcare-related stocks. A screen of TipRanks for stocks holding up in this tough environment details a few names that hit their 52-week highs. Not coincidentally, they are all involved with fighting the novel coronavirus, or Covid-19
Rightfully so, Covid-19 fears continue to spook a very high number of citizens across the globe and economic conditions are grinding, at least temporarily, to a halt. Without some clarity on which companies can withstand, and even survive this economic hit, one bona fide certainty right now is the companies directly involved in the fight against this novel virus could benefit investors and humanity in big ways.
Below are overviews of three healthcare stocks front and center in the fight against covid-19. Using the TipRanks database and screener details that these stocks stand out for their positive ratings and compelling mix of upside potential and downside protection, due primarily to the fact they are working overtime to find solutions to covid-19’s unprecedented spread. Let’s take a closer look.
Biopharmaceutical company Regeneron hit its 52-week highs last week. The firm is on the hunt for finding either a vaccine for Covid-19 or drug candidates that help reduce the severity of lung complications and fevers for patients that are susceptible to the virus’s key challenges. This is of course appealing for its potential to help stop the virus in its tracks. For investor portfolios, it offers a very compelling mix of upside potential and a stock that is unlikely to plummet in the near term.
According to research firm Canaccord analyst John Newman, drug Kevzara could hold “meaningful upside for REGN and the U.S. economy.” In fact, any global citizen could benefit as clinical trials (Phase II and III) move quickly forward because it is thought to reduce “levels of IL-6” that are found in the virus and can increase mortality, especially from patients already suffering from pneumonia.
The company is also working feverishly to “develop a two-antibody cocktail against Covid-19.” Trials could start this summer where “success here could carry meaningful upside for patients and the entire US (and world) economy.
Newman projects 2020 sales of $8.8 billion for year-over-year growth above 12%. The analyst expects EPS of $27.48 for only modest annual projected growth of 11.4%. The valuation is quite reasonable – the forward P/E is currently only at about 14.
Newman rates Regeneron shares a Buy along with a $550 price target, which represents upside of 21% from the current share price of $430. (To watch Newman’s track record, click here)
Overall, Regeneron has had 9 bullish analysts in its corner over the last three months, and 6 analysts playing it safe on the sidelines. That said, the 12-month average price target of $465 showcases a modest upside of 3% from current levels. (See Regeneron stock analysis on TipRanks)
To further illustrate the protection that these leading stocks that are fighting the coronavirus can provide for your portfolio, clinical-stage biotech Moderna is up 28% year-to-date. Moderna specializes in providing therapies and vaccines based off messenger RNA delivery methods.
Research firm Piper Sandler provided some insight into Moderna’s approach to developing a vaccine against the novel coronavirus. Moderna has been collaborating directly with the National Institutes of Health (NIH), and analyst Edward Tenthoff marveled at the speed with which Moderna was able to sequence data shared January 11 by Chinese authorities following the initial outbreak in China. According to Tenthoff and his team, “this unprecedented accomplishment in vaccine development highlights the speed of Moderna’s mRNA vaccine discovery and manufacturing process.” Data from the Phase I study could be available as soon as summer and a larger study could happen this fall into early 2021.
No profits are projected for Moderna for at least the next three years, but sales could jump 38% this year to $83.1 million and reach $100 million for all of 2021.
Tenthoff’s reiterates an Overweight rating on MRNA along with a $34 price target — 40% upside from the current share price.
The word of the Street is an overwhelmingly bullish one for this coronavirus stock, as TipRanks analytics exhibit MRNA as a Strong Buy. Out of 15 analysts polled by TipRanks in the last 3 months, 6 are bullish on Moderna stock. With a return potential of 26%, the stock’s consensus target price stands at $31.67. (See Moderna stock analysis on TipRanks)
Biopharma giant Gilead hit a 52-week high last week and is known best for its Solvadi drug that cures patients afflicted with Hepatitis C. Its drug candidate remdesivir has received international attention, due in good part to President Donald Trump suggesting its efficacy (effectiveness) in treating complications arising from Covid-19.
Despite this promise, the results appear to be only preliminary and not conclusively tested via the drug candidate development process. However, on Friday, Piper Sandler analyst Tyler Van Buren upgraded his rating on Gilead from Neutral to Overweight and bumped up his price target to $90 per share, a significant upgrade from an earlier target of $70. (To watch Van Buren’s track record, click here)
Van Buren commented: “Following our call with Gilead’s CMO, Merdad Parsey, MD, PhD, and the learnings over the past 48 hours..we are upgrading GILD shares to Overweight as we believe remdesivir will be approved by the FDA very soon, which should lead to continued outperformance. Many important takeaways from the call are highlighted below, but if the data are positive, there will be tremendous pressure to approve the COVID-19 drug within days.”
The sees a “multi-billion dollar global opportunity” from the approval of remdesivir that could represent a significant boost to Gilead’s projected 2020 full year sales of $22.4 billion. This would be a bright spot for Gilead which, after the hugely successful launch of Solvadi a few years ago, has struggled to grow its total sales. Remdesivir is also in Phase III trials in China and the forthcoming results could be quite soon.
All in all, Wall Street almost evenly split between the bulls and those choosing to play it safe. Based on 19 analysts tracked in the last 3 months, 10 rate GILD a Buy, 8 say Hold, while 1 issues a Sell. The 12-month average price target stands at $77.67, marking a modest 4.5% upside for the stock. (See Gilead stock analysis on TipRanks)