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COVID-19 Vaccine Results See AstraZeneca (LON:AZN) Slip a Bit

Thursday, November 19, 2020 | MarketBeat Staff
COVID-19 Vaccine Results See AstraZeneca (LON:AZN) Slip a Bit

The good news about this whole COVID-19 mess, if anything about it can be said to be good news, is that it has focused science to a degree probably not thought possible on several fronts. Vaccine development has taken off like a skyrocket, and now, we have several candidates well on their way through the pipeline. One of those that looked like it might have failed outright was AstraZeneca (LON:AZN), but the latest results suggest recovery. It may not be, however, a sufficient recovery.

Safe and Firing Once More

AstraZeneca's attempts to develop a coronavirus vaccine haven't always gone smoothly. After testing in October left one of the trial volunteers tragically deceased, AstraZeneca pulled back on the reins and went back to the collective drawing board. Yet when reports emerged suggesting that the death had occurred in the control group rather than the active sample, some changes were made and the company tried again.

The latest results proved very encouraging. A completed Phase Two trial found that the vaccine was not only safe, but also delivers an immune response that's similar among all adults. This is especially welcome for seniors, who so often have troubles that younger adults don't have.

The latest study featured 560 healthy adults for a base, and among them, 240 were over the age of 70, which makes this test clearly weighted in favor of the senior citizen. The immune responses produced by those over the age of 56 were found to be similar in nature to those who were between 18 and 55, producing a “T-cell response” with the first dose, followed by antibody responses within 28 days of the booster dose's arrival.

Back a Length at Least

However, looking at the overall field, it's clear AstraZeneca is behind. Very behind. As companies like Moderna (NASDAQ:MRNA), Pfizer (NYSE:PFE) backed up by BioNTech (NASDAQ:BNTX), and several others not only clear Phase 3 testing but prepare for full market launches, AstraZeneca's successful conclusion of Phase 2 testing puts the company behind an eight-ball of increasing size.

While the company saw a moderate uptick in pre-market trading, the company's downward slope over the last few days has only continued to drop, and the company has as of this writing lost almost half a percent of its total share price.

Unconvinced Analysts Beginning to Look Elsewhere

A further problem for AstraZeneca is that the analysts don't seem too optimistic about the company's fate going forward, either, as our latest research found. The company rates the same “hold” it's held for the last three months, with the same proportions as well. There are currently six “sell” ratings on the company, along with two “hold” and 12 “buy”. That's not too far from a buy—six months ago, that's where the company was with four “sell”, two “hold” and 14 “buy”—but that little slip is enough to put it in a “hold” category. It's also worth noting that the price target has been trending upward for the last six months as well.

For those who already hold AstraZeneca, there's still reason to stay in the pool. AstraZeneca isn't just a coronavirus vaccine, after all; the company has a range of other medications to offer up, and those will continue to provide profits for the company for some time to come. Plus, even if a few other companies beat AstraZeneca to market, a first-mover advantage here means much less than it usually does. There's a substantial market of people out there who will want this vaccine. Not everyone, of course, because some will always lag the early adopters for one reason or another. That's axiomatic in marketing circles.

However, there will be enough interested customers to make for a big market for all concerned. Meanwhile, supply issues will prevent anyone from really taking advantage of first-mover status, so by the time AstraZeneca gets caught up, it should still have plenty of market left to serve and profit by therein.

The more vaccine candidates available, the better for all concerned. Supply chain issues will prevent anyone from taking a dominant path and exercising potential monopoly control, while consumers will benefit from having a range of choices available. AstraZeneca's horse may not cross the finish line first—it may no longer have a hope of doing so, in fact—but it will certainly show, and that's good enough given the race we're in right now. It may not be a great idea to buy more AstraZeneca stock, but hanging on to what you've got already and enjoying the fruits of this labor is a solid enough plan.

Companies Mentioned in This Article

CompanyBeat the Market™ RankCurrent PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
AstraZeneca PLC (AZN.L) (AZN)1.1GBX 7,791.64-1.8%2.77%41.01HoldGBX 8,462.35
Pfizer (PFE)2.4$40.09-1.7%3.79%15.91Hold$40.00
BioNTech (BNTX)1.1$118.68-2.0%N/A-59.34Hold$91.56
Moderna (MRNA)1.3$157.26+10.0%N/A-97.07Buy$105.00
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Every trading day, between 500 and 800 new recommendations and research reports are issued by sell-side equities research analysts. There are between 300 and 500 brokerages and research houses that issue ratings, price targets and recommendations and more than 5,000 securities around the world that regularly receive coverage from research analysts.

MarketBeat has tracked more than 170,000 distinct analyst recommendations in the last 12 months alone. Given the volume of ratings changes that occur each day, it can be difficult to sift through the noise.

Analysts don't always get their "buy" ratings right, but it's worth taking a hard look when more than a dozen different analysts from different brokerages and research firm are giving "strong buy" and "buy" ratings to the same stock.

This slide show lists the 20 companies that have the highest average analyst recommendations from Wall Street's equities research analysts over the last 12 months.

View the "20 Stocks Wall Street Analysts Love the Most".

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