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United Investment Limited - This medical stock faces significant short-term hurdles
This medical stock faces significant short-term hurdles, but there may be potential for development in the future.
First, the stock market as a whole fell as investors worried about the Federal Reserve's recent interest rate rise. Majority of the stocks were greatly affected as a result of this action. NVAX was not an exception.
Second, JPMorgan Chase & Co. (JPM) analyst Eric Joseph downgraded the vaccine stock to overweight from neutral (meaning likely to do better in the future). Joseph also reduced NVAX's 12-month price estimate from $132 to $27, which greatly affected how the stock is viewed by potential investors.
Analysts do not always make the best rating decisions. However, there are valid reasons to be concerned about NVAX's prospects in the short future. COVID-19 vaccines, for instance, have largely plateaued in the United States. The number of COVID-19 cases has been decreasing in a very visible rate. The demand for NVAX's Nuvaxovid vaccine is projected to be minimal.
Perhaps Nuvaxovid's condition in Europe will improve slightly. The European Commission has extended the vaccine's conditional market clearance for use as a booster. However, NVAX is still waiting for U.S. approval to use Nuvaxovid as a booster.
NVAX anticipates filing for approval of their Coronavirus Omicron booster in the fourth quarter of this year. If there is another increase in COVID-19 cases this winter, NVAX may be able to secure new supply arrangements.
In the long run, the industry may turn toward combination vaccinations that protect against both COVID-19 and flu viruses. NVAX has the potential to be a market leader in the combo market. The business anticipates that its COVID-flu combination vaccine candidate will enter late-stage testing in 2023.
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