Pfizer (NYSE:PFE) stock has sunk 14% since August 18, when it hit a new high not seen since 1999.
With negative momentum picking up, could PFE stock be at risk of surrendering more of its summer gains, even as Delta variant cases climb?
Indeed, rival COVID-19 vaccine maker Moderna (NASDAQ:MRNA) has been stealing a great deal of the limelight from Pfizer in recent months.
I remain bullish on Pfizer stock, and don't believe that investors should treat any good news for Moderna as a material negative for Pfizer. (See PFE stock charts on TipRanks)
Moreover, Moderna stock's valuation has become quite hefty, as the stock has doubled up many times since last year. Pfizer has a much more modest valuation, a bountiful 3.4% dividend yield, and growth prospects that seem largely underrated.
The COVID-19 Defence Race
A recent Belgian study revealed that Moderna's COVID-19 shot produced twice as many antibodies than that of Pfizer's.
News of Moderna's more potent shot has given Moderna stock quite the shot in the arm, perhaps at the expense of Pfizer stock.
Still, the data doesn't suggest that Pfizer has an inferior vaccine. Pfizer's scientists were quick to defend their shot, noting that lower doses were intentional and aimed to reduce potential side effects.
It's not just news of Moderna's more potent jab that has investors siding with MRNA over PFE.
Recently, Moderna announced a combo shot that aims to boost protection against COVID-19, as well as the flu. This is just another innovation that has investors excited. Still, it's a mistake to count the larger, more mature Pfizer out of the game, seeing as it is more than capable of producing a similar vaccine of its own.
Earlier this year, Pfizer announced plans to launch a COVID-19 pill by the end of 2021. The oral drug, which is now in its mid-to-late stage trials, aims to prevent the coronavirus from multiplying.
Should the pill, which seems to show promise, launch at some point over the next several months, I find it hard to believe that Pfizer stock will remain stuck at these lows.
In any case, I think it's a mistake to count Pfizer out of the game just because Moderna has been making headlines.
Wall Street's Take
According to TipRanks’ analyst rating consensus, PFE stock comes in as a Hold. Out of 10 analyst ratings, there are two Buy recommendations, and eight Hold recommendations.
The average PFE price target is $45.70. Analyst price targets range from a low of $41 per share, to a high of $61 per share.
Bottom Line
After Moderna's past year of incredible gains, the company now commands a market cap of $174 billion. That's $76 billion shy of Pfizer's $250 billion market cap. Given today's valuations, and Pfizer's underrated innovative capabilities, I'd bet that the market cap gap between Pfizer and Moderna is likelier to widen again, rather than close.
Pfizer may be the larger of the two companies, but it's not much larger anymore. Despite its old age, Pfizer has proven it can innovate, with its effective COVID-19 vaccine and oral treatment in the works.
Disclosure: Joey Frenette owned shares of Pfizer at the time of publication.
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