The healthcare industry received a lot of attention from investors during the early days of the COVID-19 pandemic. Interest in space has waned a bit in recent months, but a new catalyst could be on the way.
Leading Senate Democrats recently proposed a new $21 billion emergency supplemental funding bill to prepare for the next phase of the pandemic and other emerging diseases.
The project would allocate $16 billion to the Emergency Public Health and Social Services Fund for testing, vaccines, medical supplies and research. Another $5 billion in emergency funding is intended to help other countries fight the coronavirus.
“Our efforts to stop this disease abroad to protect us here at home are quickly running out of funding, and we’re running out of time to act,” Patrick Leahy, chairman of the Senate Appropriations Committee, said in a statement.
The bill could give investors a new reason to check out companies that make vaccines, develop treatments or manufacture antigen tests. Here’s a look at three of them.
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With a history that can be traced back to 1849, Pfizer is a mega-cap pharmaceutical and biotechnology company. The pandemic made him even better known worldwide.
More than 3.6 billion Pfizer-BioNTech COVID-19 vaccines have been shipped to 180 countries worldwide. Meanwhile, Pfizer is also the developer of Paxlovid, an oral antiviral pill used to treat COVID-19.
The company reported strong results this earnings season. In the second quarter, Pfizer generated $27.7 billion in revenue, representing a 47% year-over-year increase. Adjusted earnings per share were $2.04, up 92% from the same period last year.
The stock, however, is not immune to the market sell-off in 2022. Year-to-date, Pfizer shares are down 13%.
JPMorgan analyst Chris Schott has a ‘neutral’ rating on Pfizer and a price target of $57 – about 15% above where the stock is today.
Gilead Sciences (GILD)
Gilead Sciences is another biopharmaceutical company that has made headlines during the pandemic. It is the developer of Veklury (remdesivir), the first FDA-approved antiviral drug for the treatment of COVID-19 that requires hospitalization.
The company released second-quarter earnings earlier this month. For the quarter, revenue increased 1% year-over-year to $6.3 billion. Adjusted earnings per share fell 13% year-over-year to $1.58.
While these numbers don’t seem impressive on their own, they shattered Wall Street’s expectations. On average, analysts had expected Gilead to report earnings of $1.52 per share on $5.86 billion of revenue for the quarter.
The direction also reinforced its orientation. For the full year 2022, they expect the company to earn $24.5 billion to $25 billion in total product sales, up from the previous guidance range of $23.8 billion to $24.3 billion. billion.
Stocks soared after the results were released. However, it is still below 10% year-to-date.
Piper Sandler analyst Do Kim recently reiterated a ‘neutral’ rating on Gilead, while raising the price target from $71 to $74. -target implies an upside potential of 14%.
Abbott Laboratories (ABT)
Abbott Laboratories is a healthcare company specializing in medical devices, diagnostics, nutritional products and branded generic drugs.
Like the other two companies, Abbott hasn’t been a big gamble. Its shares are down 21% in 2022.
But the company is solidly positioned for another wave of COVID-19 – it makes COVID-19 test kits.
According to the latest earnings report, sales related to COVID-19 tests totaled $2.3 billion for Abbott in Q2 2022.
Sales totaled $11.3 billion in the quarter, representing a 10.1% year-over-year increase. Adjusted earnings per share grew 22.2% year-on-year to $1.43.
Management expects the company to earn $6.1 billion in sales related to COVID-19 testing in the year 2022.
Citi analyst Joanne Wuensch has a ‘buy’ rating on Abbott and a price target of $123 – about 12% above current levels.
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