Israel's largest health maintenance organization (HMO), Clalit Health Services Research Institute, has published a research paper that confirms the efficacy of Pfizer’s COVID-19 vaccine in preventing infection and morbidity across all age groups, according to Globes.
Clalit surveyed 600,000 Israelis who received the Pfizer (PFE) vaccine and compared the results with 600,000 members with similar profiles who were not vaccinated.
Of the 600,000 who did receive the vaccine, Globes reported that the research showed a 94% drop in symptomatic infections and a 92% decline in seriously ill COVID patients.
According to the reports, the research found a 91% to 99% efficacy rate against severe infection from a week after the second dose of the vaccine was administered, and as said by the head of Clalit and chief innovation officer, Ran Balicer, “in terms of more than 14 days and more after the second dose, in initial tests, we identify even higher efficacy in preventing symptomatic disease and severe illness among those vaccinated for every age.” (See Pfizer stock analysis on TipRanks)
RBC Capital analyst Randall Stanicky reiterated his Buy rating on Pfizer two weeks ago and set his price target at $42. This implies upside potential of around 21% from current levels.
In a commentary note prior to the release of Pfizer’s Q4 earnings results, Stanicky noted that the earnings release should allow investors to better understand the underlying Biopharma business, which has been overshadowed recently by vaccine headlines.
Consensus among analysts is a Hold based on 2 Buys and 7 Holds. PFE has lost 5% in value since this time last year but the average analyst price target of $38.89 suggests upside potential of around 15% over the next 12 months.
Pfizer scores a Neutral 6 out of 10 on TipRanks’ Smart Score, which suggests that PFE shares are expected to perform in line with market expectations.
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After surging on COVID-19-related catalysts, investors have cooled on Zoom Video (ZM) stock. With prices having topped $588.84 per share, the popular remote work play has since moved lower, and now changes hands at around $433 per share.
As the pandemic continues to affect office life, it’s hard to say that Zoom has peaked, as the move towards a permanent remote-work environment may continue even after the pandemic abates.
This trend bodes well for Zoom, and its remote conferencing platform. Even as Wall Street continues to give this stock a rich valuation, shares could continue to gain, albeit at a slower pace.
However, this doesn’t mean that shares won’t head lower in the near-term. As tech giants like Microsoft (MSFT) go after a larger piece of this lucrative market, competitive challenges could make it tough for Zoom to live up to its aggressive growth projections.
So, weighing the long-term trends against the potential risks, what’s the play? One could consider the shares a cautious buy at today’s prices, and a solid buy on any pullback.
Zoom Has a Lot Going For it
Risk-averse investors may be uncomfortable buying Zoom at its current high valuation. However, the bulls make a solid argument as to why it has more runway ahead.
Several big tech names are adopting full-time, remote work policies. Facebook (FB) was one of the first, but now, other major Silicon Valley employers like Salesforce (CRM) are making the leap as well.
Just because Silicon Valley is doing it doesn’t necessarily mean that corporations elsewhere will follow suit, but as we’ve seen with other changes to the working environment, such as open offices, this trend is likely to trickle down to businesses large and small.
Future gains in the share price will likely be more gradual than what we’ve seen recently, but a continued shift to a permanent remote working environment could help push Zoom shares well above their all-time highs.
Downside Risk Going Forward
So far, today’s growth-oriented stock market doesn’t seem too worried about the rich valuation of ZM, but with the stock trading at a high forward P/E ratio of 148.2x, any sort of hiccup may be enough to fuel a near-term move lower.
Why? This frothy valuation is predicated on its expected outsized growth. If the company fails to deliver, a severe sell-off could be on tap, probably not to pre-pandemic price levels, but those buying today could experience heavy losses.
On top of this, the competition in Zoom’s main market is heating up. Rivals like Microsoft, with its Teams communications platform, could give it a run for its money.
Does this mean it’s high time to sell Zoom ahead of these looming risks? Not exactly. Sure, they may put some near-term downward pressure on the stock, but for those with a longer time horizon, there’s still merit to buying shares at today’s prices.
What Analysts are Saying about ZM Stock
According to TipRanks, Zoom Video has a Moderate Buy consensus rating. With 10 Buy ratings, 11 Hold ratings, and just 1 Sell rating, Wall Street’s sell-side community is largely bullish or on the fence about this stock.
What about price targets? ZM stock has an average analyst price target of $481 per share, implying 11.1% upside potential from today’s prices. (See Zoom Video stock analysis on TipRanks)
Bottom Line
As COVID-19 continues to affect the world, hopes of a rapid recovery have been dashed. This points to continued strength for Zoom Video, and in turn, its stock price.
Yet, keep in mind that shares could still see some downward pressure in the coming months, whether it’s due to a reversal in remote working trends, or from rival tech giants muscling in on its turf.
Bottom line: ZM is still a worthwhile long-term buy at today’s prices, but waiting for a correction to back up the truck might be more prudent.
Disclosure: Thomas Niel held no position in any of the stocks mentioned in this article at the time of publication.
Disclaimer: The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities.
Siemens Healthineers' $16.4 billion purchase of Varian Medical Systems is likely to get conditional clearance from EU antitrust regulators, Reuters has learnt.
The clearance comes after Siemens Healthineers last month offered concessions to address competition concerns regarding interoperability, according to the report. The European Commission is scheduled to decide on the deal by Feb. 19.
Varian (VAR) announced the $16.4 billion takeover by Siemens in August last year. According to the terms of the agreement, Siemens Healthineers offered to pay $177.50 per share in cash for all outstanding shares of Varian. This represented a 42% premium to the 30-day volume weighted average closing price of Varian’s shares as on July 31, 2020.
The acquisition seeks to create a multi-disciplinary healthcare company with a comprehensive cancer care portfolio. The transaction is expected to close in the first half of this year. In October last year, Varian shareholders had also approved the transaction.
Varian is a developer of oncology care technologies and solutions while Siemens Healthineers is a medical technology company whose portfolio includes imaging and diagnostic systems and advanced therapy systems including angiography systems and computed tomography (CT) systems. (See Varian Medical Systems stock analysis on TipRanks)
Late last month, Barrington Research analyst Michael Petusky reiterated a Sell on Varian stock.
Petusky commented on the acquisition, “…these two businesses appear highly complementary and will establish an integrated platform of end-to-end oncology solutions from front-end screening and diagnosis to the delivery of care and post-treatment survivorship. It is worth mentioning that Varian will continue to operate under the Varian brand name given its strength in the marketplace it serves.”
The rest of the Street is cautiously bearish about the stock with a Moderate Sell consensus rating. That’s based on 2 analysts recommending a Hold and 1 analyst suggesting a Sell. The average analyst price target of $178 implies 1.07% upside potential to current levels.
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IBM announced that global energy company BP has joined the tech giant's quantum network as an industry partner to boost the use of quantum computing in the energy industry.
IBM quantum network is a community of more than 130 members, who advance the development of quantum computing and explore practical applications.
The partnership will give BP access to IBM’s (IBM) quantum expertise, software and the most advanced quantum computers through the cloud. It also includes a premium 65 qubit quantum computer which is the largest universal quantum system in the industry at present.
Notably, IBM is targeting a 1,000 plus qubit system by 2023 end. The two companies will explore the use of quantum computing to address business and engineering challenges and develop potential applications to drive efficiencies and reduce carbon emissions.
Quantum computing can be used in diverse areas such as modelling chemistry and build up of clay in hydrocarbon wells, analyzing fluid dynamics in wind farms and optimisation of autonomous robotic inspection of facilities.
By the end of 2030, BP seeks to achieve about 50 gigawatts of net renewable energy capacity and reduce its oil and gas production by 40%.
Dario Gill, senior vice president and director of IBM Research said, “The energy industry is filled with opportunities to see value of quantum computing use via discovery of new materials that can improve generation, transfer as well as storage of energy.” (See IBM stock analysis on TipRanks).
Morgan Stanley analyst Kathryn Huberty on Jan. 22 reiterated Hold rating on IBM stock with a $140 price target implying 16% upside potential.
Huberty noted that a shift to shorter duration deals raised questions if customers are willing to commit to the company’s products over a longer timeline.
The analyst believes a change in software growth trajectory is essential to build investor confidence for sustainable revenue growth over a longer term for the company.
The rest of the Street remains cautiously optimistic about the stock with a Moderate Buy consensus rating based on 2 Buys and 3 Holds. That’s with an average analyst price target of $137.25, implying 14% upside potential from current levels.
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