Would AstraZeneca Stocks Hike to New Highs?

The COVID-19 pandemic has produced several winners in the stock market, including pharmaceutical giant AstraZeneca (LON 🙂 (NYSE :). The company is working with its partner Oxford University to develop a vaccine against SARS-CoV-2, the virus that causes COVID-19.

Year-to-date, AZN's stock is up about 11% due to investor optimism about the company's drug pipeline, including the potential vaccine. At the end of July, UK listed stocks hit a record high of 10,120p. They now change hands around 8.605p. US-listed stocks, which hit a record high of $ 64.94 during the same period, are currently hovering around $ 55.

AstraZeneca 1-Year Review.

As of September 15, the number of COVID-19 infections reported worldwide has exceeded 29 million. The outbreak has already killed nearly 1 million people worldwide. That's why governments and populations around the world are ready to welcome the news that a vaccine or drug is ready to use.

At the end of July, AstraZeneca released a rugged version that exceeded expectations. Current treatments and the drug channel for serious conditions include cardiovascular disease, diabetes, gastrointestinal problems, infection, inflammation, oncology, kidney and respiratory disease. Investors are now wondering if they should buy into the company, which is one of the front runners in the hot race to develop a vaccine against the new coronavirus. Let's take a closer look.

AstraZeneca At Top Of The FTSE

In early 2020, before the pandemic became part of our daily lives, oil company Royal Dutch Shell (LON 🙂 (NYSE 🙂 had the largest market capitalization on de, the UK's largest stock index.

The leadership position had moved to AstraZeneca by early spring – clearly a sign of the times. Late-stage trials are underway not only in the UK, but also in Brazil, South Africa and the US. Then, earlier this month, the company announced that it was ending clinical trials of its coronavirus vaccine candidate, AZD1222. The reason was a possible side effect.

Earlier this week, however, the British Medicines Health Regulatory Authority gave the green light to restart the studies. Between the two announcements, AZN stock has had a choppy ride.

On the FTSE, AZN stocks are followed by another healthcare and vaccine leader, GlaxoSmithKline (LON 🙂 (NYSE :). In July, GSK and CureVac (NASDAQ 🙂 announced collaboration in strategic messenger ribonucleic acid (mRNA) technology. Messenger RNA instructs the body to produce proteins for a particular disease. Unlike AZN shares, GSK's shares are down about 15% since the beginning of the year.

As a result of the recent increase in the AZN stock, its valuation has become rich. The forward P / E, P / S and P / B ratios are 22.68, 5.49 and 11.54 respectively. In comparison, those statistics for GSK shares are 12.94, 2.20, and 5.64.

Long-term investors who also pay attention to short-term technical analysis and charting may be interested to know that AZN shares are currently overbought. While stocks may remain over-bought for a long time, a downturn in broader markets or the pharmaceutical sector would likely hit AstraZeneca as well.

Who's Else?

Governments, citizens and investors around the world are looking at a wide variety of biotech and pharmaceutical companies who have gone through several steps to develop a treatment that may eventually be approved.

In addition to AstraZeneca, GlaxoSmithKline and CureVac, there are a range of companies working on a vaccine or other type of drug to fight the new coronavirus. This list includes:

Amgen (NASDAQ 🙂
Biontech (NASDAQ 🙂
Gilead (NASDAQ 🙂
Ibio (NYSE 🙂
Inovio Pharmaceuticals (NASDAQ 🙂
Moderna (NASDAQ 🙂
Novavax (NASDAQ 🙂
Pfizer (NYSE 🙂
Sanofi (NASDAQ :), and
Sorrento Therapeutics (NASDAQ 🙂

Stocks in companies involved in efforts to develop a cure for COVID-19 are strongly driven by new headlines. As companies release news updates, investors click the "buy" or "sell" button. In the coming weeks, each of them could become a winner in the eyes of the public and investors.

Bottom Line

Vaccine development for COVID-19 is in full swing as companies push to complete clinical trials to develop a cure for the coronavirus. As one of the most respected names in biopharmaceuticals, AstraZeneca deserves the attention of investors for its vaccine candidate and its mainstream pharmaceutical business and complementary drugs in the pipeline.

However, we find AZN shares pricey at these levels. Potential investors may consider a drop of 5% -7% as an entry point to the stock. In the case of positive news about the clinical trial, AZN could easily hit a new record one day. Long-term shareholders would also be entitled to dividends. The current yield is 2.59%.

Investors may also want to investigate GSK stocks with a 5.28% dividend yield. We would consider buying the dips.

Finally, we think Pfizer and Moderna could also be among the first companies to make successful announcements. Investors may also want to keep those stocks on their radar screen.

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