Oil prices surge to two-week winning streak as Iran supply fears grip markets
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Moderna stock has jumped after the legal settlement, but valuation concerns remain.
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The biotech sector showed resilience despite rising geopolitical tension.
- What are the best biotech stocks to watch right now?
Biotech company Moderna’s (NASDAQ:MRNA) stock emerged as one of the biggest gainers among large US companies on Wednesday, rising 15.99%.
The jump came after the company settled a long-running legal dispute related to the technology used to develop its COVID-19 vaccine. The settlement removes a major uncertainty for the company and allows management to focus more on developing new drugs in its pipeline.
Under the agreement, Moderna will pay up to $2.25 billion to Roivant Sciences’s (NASDAQ:ROIV)’ Genevant unit and Arbutus Biopharma. The payment is lower than the roughly $3 billion the market had expected. Analysts believe this outcome may shift investor attention toward Moderna’s ongoing work on cancer vaccines.
At the same time, the stock has risen sharply in recent months. Moderna shares have gained more than 41% in the past month and over 108% in the last six months. After such a strong rally, some investors may start taking profits, which could lead to a pullback.
Valuation models also suggest the stock looks expensive. Estimates indicate the shares trade about 22% above their fair value, while the average analyst price target sits roughly 27% below the current market price.
Fortunately, other opportunities exist in the biotech sector where the timing appears more attractive. The sector has held up relatively well despite rising geopolitical tension after the recent conflict involving Israel, the US, and Iran.
Beyond Moderna, several biotech companies have also posted strong gains in recent days, even as markets remain cautious. In particular, five biotech stocks with market capitalizations above $500 million have climbed more than 10% over the past week.
However, the biotech stocks that have recently stood out may not automatically become the best opportunities in the sector in the coming weeks.
9 Biotech Stocks With Massive Upside Potential
We therefore turned to the Investing.com screener, looking for stocks that meet the following criteria:
- Market capitalization greater than $500 million
- Biotech industry
- Upside potential of more than 25% according to InvestingPro Fair Value
- Upside potential of more than 25% according to analysts
- InvestingPro Health Score greater than 2.5/5
This search has identified 9 opportunities:
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More specifically, these US biotech stocks currently trade 27.6% to 64.6% below their estimated fair value. Analysts believe they offer potential upside ranging from 31.6% to 251.4%.
Other High-Upside Opportunities in the Market
Finally, there are many other ways to identify attractive stocks right now, including preconfigured screens that allow investors to filter companies meeting specific criteria with a single click.
Available themes include “value,” “growth,” “quality,” “defensive,” and others, enabling investors with different profiles to find stocks aligned with their strategy.
Please note: Some searches are reserved for InvestingPro subscribers with a PRO+ plan.
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Disclaimer: This article is written for informational purposes only. It is not intended to encourage the purchase of assets in any way, nor does it constitute a solicitation, offer, recommendation or suggestion to invest. I would like to remind you that all assets are evaluated from multiple perspectives and are highly risky, so any investment decision and the associated risk belong to the investor. We also do not provide any investment advisory services.