A nurse takes a Moderna Covid-19 vaccines ready to be administered at a vaccination site
Apu Gomes/AFP via Getty Images
Novavax stock and shares of other vaccine makers fell Friday after the Supreme Court blocked the Biden administration’s vaccine mandate for companies that employ 100 workers or more. It’s just one more headwind for a group of stocks that once seemed untouchable.
The Supreme Court’s conservative majority dealt a major setback to the Biden administration’s effort to boost vaccination rates on Thursday, ruling that the government didn’t have the unilateral power to impose the mandate for all large businesses through the Occupational Safety and Health Administration.
The ruling does not prevent private employers, states or colleges and universities from imposing their own mandates, and some employers, such as Citigroup (ticker: C), have already announced they will be requiring vaccinations.
“These SCOTUS decisions are in alignment with what we expected,” wrote Raymond James analyst Chris Meekins in a research note. “Employers will see the block of the OSHA mandate as a major win, but the Biden administration will likely criticize this decision.”
The Supreme Court let stand a vaccine mandate for most healthcare workers, which requires people who work at federally funded healthcare facilities be vaccinated with no testing exception. Justices Samuel Alito, Clarence Thomas, Neil Gorsuch, and Amy Coney Barrett were against the mandate, while five justices supported it.
Shares of Moderna ( MRNA ) were down 0.8% Friday, while Novavax ( NVAX ) dropped 3.6%. Pfizer ( PFE ) stock dropped 0.6% and vaccine partner BioNTech ( BNTX ) lost 2.5%. Johnson & Johnson ( JNJ ), which makes a vaccine that is less popular in the U.S., dipped 0.6%.
For BMO Capital Markets analyst David Seigerman, the Supreme Court’s ruling didn’t much alter his estimates for Covid vaccine sales. Seigerman, who tries to divorce the political landscape from actual sales as much as possible, believes th selloff Friday was driven by a “sell-the-news” situation, where some investors got spooked by the news.
“There may be some confusion and uncertainty as to what the longer term market for a Covid vaccine is,” he said.
Vaccine stocks largely gained across the board last year as countries geared up their vaccination campaigns. BioNTech rose 91%, Pfizer gained 51%, and Moderna was up 62%. They’re not doing so hot this year, with all vaccine stocks seeing declines within the first weeks of 2022 as vaccination rates stall.
Even so, not all vaccine manufacturers have the same long-term outlook. Companies that are more dependent on the Covid vaccine will be more at risk for headline volatility than diversified companies.
“Moderna and Novavax are just driven by the vaccine, so they’re going to be a lot more impacted when there’s news, positive or negative,” he said.
Seigerman on Friday raised his price target for Pfizer to $76 from $60, a new Wall-Street high above the mean target price of $59. Seigerman views 2022 as the peak year for Covid-related revenue for Pfizer, forecasting sales of $60 billion. He reiterated an Outperform rating on the stock, saying it could be the first pharmaceutical to break $100 billion in revenue.
“Beyond this year we see the COVID pandemic, entering an endemic phase where vaccine and oral revenues will be driven by booster shots, and the pivot to oral stockpiling and a more commercial, rather than government market,” he wrote in a research note.
The analyst predicts Pfizer’s main upside this year could come from Paxlovid, its oral Covid pill, as governments begin to stockpile the treatment over vaccines as the pandemic turns endemic. As a large pharmaceutical company, Pfizer also will see catalysts from other drugs, including treatments for diabetes, breast cancer, and gene therapy.
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