Should you sell your vaccine stocks with US booster shots in limbo? - The Average Joe

    Should you sell your vaccine stocks with US booster shots in limbo?

    Victor Lei — Head of Research

    September 21, 2021

    vaccine stocks

    September 21, 2021

    Vaccine stocks are stuck in limbo over a decision to offer booster shots to most US adults — criticized by global health organizations.

    What’s the big deal? Governments are deciding on a booster shot mandate and the final decision could send vaccine stocks swinging. But the world is conflicted on boosters:

    • In mid-August, Biden planned to start offering booster shots to most US adults — pending FDA approval.
    • Last week, the World Health Organization said it lacks sufficient data to recommend boosters to healthy patients.

    So now, Biden’s plans are forced to scale down, given the FDA recommendation of booster shots for only 65+ — right before booster shot campaigns were supposed to launch this week.

    In the past few months, the Delta variant spread and news of booster shots sent COVID stocks even higher after a big 2020. In the current year, Moderna (NASDAQ:MRNA) is up 280% and Pfizer (NYSE:PFE) is up 20%.

    But investors holding on despite uncertain futures have a difficult choice to make, sell and lock in the big returns or hold for a potential booster shot?

    Selling pressure: Analysts warn vaccine stocks could have trouble replicating their large sales this year. According to JPMorgan (via FT):

    • Vaccine companies are driven by momentum relating to variants, boosters, full approval and not fundamentals.
    • Current vaccine sales levels are unsustainable in the longer term.

    And for Moderna, with only one approved drug — the COVID vaccine — the slowing sales could have a bigger side effect compared to Pfizer, which has a portfolio of other drugs.

    Investors: Approval of a booster shot could send stocks up in the near term but as we’ve seen with other growth stocks this year, stocks can fall fast once they lose momentum. If you’re holding on to big gains from these companies, it might be time to move on.

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