Which Vaccine Stock Will Benefit Most From FDA's "Mix And Match" Approval?

On Tuesday, it became clear that the FDA plans to allow for a “mix and match” approach to vaccine booster shots, allowing—as the Europeans have recommended—people who have been vaccinated against Covid-19 to get a booster shot made from different company than the company that gave them their first dose.

 In case you suffer from any long Covid-related intellectual deterioration, this means, for example, you can get booster shot from Johnson & Johnson (J&J) or Pfizer even if your first dose was delivered into your arm courtesy of Moderna. Expectedly, vaccine stocks, some of which have been deflated the last couple of months, saw a boost in their stock price on the news.

But which one is best positioned in the markets to benefit from the preliminary news?

Short-Term Boost Will Go to Johnson & Johnson

First, J&J JNJ soared on Tuesday morning on not just the FDA booster news, but on reporting earnings which beat estimates. The company reported sales of $23.3 billion for the third quarter, up 10.7% from the same quarter of the previous year. Adjusted earnings impressively rose to $2.60 per share, up 18.2% from last year. It’s also important to point out that, like another Covid-19 vaccine-maker Pfizer PFE, J&J shouldn’t be thought of as a “vaccine” stock like Moderna MRNA. Pfizer and J&J are both massive companies whose short and long-term success are not pinned solely on the hope of winning the vaccine wars, for Covid-19 or for any other future virus. Also, J&J has gone on record stating that it will sell its Covid-19 vaccine and boosters for cost. Shareholders can only hope that “cost” will be artificially inflated, as many companies—like my mechanic for instance—are wont to do.

The reason why, however, J&J is poised to benefit most on this booster news—assuming the FDA goes along with the committee's recommendation— is precisely because the J&J traditional one-shot vaccine has proven to be less effective at fighting the virus than the two-dose MRNA vaccines developed by Moderna and Pfizer.

While all three of the aforementioned companies’ vaccines are likely to receive broad authorization (Pfizer’s booster currently stands as the only one to receive emergency use authorization), the MRNA boosters of Moderna and Pfizer, in light of their vaccines’ efficacy, will likely be reserved for (or prioritized towards) use by older people and younger people more at risk from Covid-19, whereas the J&J booster will more likely be given a green light for anyone who wants a boost.

In other words, the J&J vaccine’s inefficacy as compared to its peers is the reason why its booster shot will be more available across a wider population spectrum.

Long-Term All Buys but Moderna Stock Has Biggest Upside

The only true “vaccine” stock in the bunch is Moderna, a company whose future will rise or fall on the success of its MRNA vaccine technology, both for Covid-19 and other maladies. Pfizer is always a long-term buy, irrespective of how much it makes from its Covid-19 vaccines, as is J&J. But the upside on these companies is limited over the near- and mid-term. Looking at the charts, Pfizer’s stock is underwhelmingly stable. J&J’s stock has more room to run short-term. But Moderna, the stock that has become synonymous with the fight against Covid-19 and a favorite amongst the new retail Robinhood.com crowd, holds the most potential when it comes to a big boost in its share price.

Moderna: A Stock Fan-Favorite

While arguably inflated over the last year or more, Moderna, now trading at $333 per share (an insane valuation according to many), hit over $484 per share just in August. This means that the retail mob is as excited about the company’s long-term potential as it is excited about the stock’s ability to move on trading enthusiasm.

Whether or not you think Moderna is fairly valued at $333 per share—or even $200 per share—isn’t the only consideration. The stock likes to move because traders like to move it. And it is for that reason that, in light of this recent news, it’s time to place some chips back on the Moderna bet—both for the short-term boost, and for the chance that this recently-known company hits another post-Covid MRNA-related virus-fighting jackpot.