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IBD Stock Of The Day Flashes Yet Another Sell Signal

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BNTX


$30.57


9.95%


IBD Stock Of The Day Flashes Yet Another Sell Signal20%

IBD Stock Analysis

  • After peaking Aug. 10, BNTX stock has flashed several sell signals
  • It closed below its 50-day moving average line on Friday, a negative sign
  • BioNTech sales and earnings seen declining
IBD Stock Of The Day Flashes Yet Another Sell Signal

* Not real-time data. All data shown was captured at
12:59PM EDT on
09/28/2021.

BioNTech (BNTX) is the IBD Stock Of The Day. After running up aggressively in August, BioNTech stock is now embroiled in a firestorm of sell signals.




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BioNTech stock has fallen despite a bevy of good news for the Covid vaccine maker. On Tuesday, BioNTech and partner Pfizer (PFE) sent data to the Food and Drug Administration in support of their vaccine in children age 5-11. U.S. officials recently authorized their Covid booster shot for older people and those at risk of developing severe Covid.

SVB Leerink analyst Geoffrey Porges called it “open season” on boosters. He expects vaccination centers, clinics and pharmacies to be swamped with vaccination appointments for “the worried well” and people who are truly eligible for a booster dose.

“Depending on contracts, ordering, pandemic status, variants and timing for booster access, demand could be even higher than our current $14.9 billion forecast for the fourth quarter,” he said in a note.

But on the stock market today, BioNTech stock tumbled 10% to close at 276.52.

BioNTech Stock Under Pressure

Tuesday’s dive is far from the first for BioNTech stock.

Shares enjoyed a meteoric rise beginning in July before hitting a record high at 464 on Aug. 10. Investors could have taken partial profits on Aug. 4 and Aug. 9 as BNTX stock skyrocketed, capping an already near-vertical ascent.

The overall BioNTech run came amid a growing number of delta-related Covid cases in the U.S. and abroad. But, according to the Centers for Disease Control and Prevention, daily cases began declining in mid-September.

The decline in cases came as BioNTech stock started its downfall. A couple of days after hitting its top, BioNTech shares sold off in heavy volume and closed below their 10-day line. That’s the first place CAN SLIM investors could have made a defensive sale.

Last week, it appeared BioNTech stock might create an early entry. Then, shares closed below their 50-day moving average for the first time in the run, according to MarketSmith.com. But it didn’t undercut that key line by much.

That changed on Monday when BioNTech stock continued its downfall, losing 7.9% in huge volume and undercutting the low of its current consolidation. BNTX continued that decline on Tuesday, falling again in hefty volume. Savvy investors who didn’t sell earlier might want to consider getting out now.

BioNTech stock has given up the vast majority of its big run from its 252.88 buy point in July.

Profits Expected To Slide

Pfizer and BioNTech now have the only fully approved Covid vaccine in the U.S. The vaccine is approved for people age 16 and up. It’s also authorized for children age 12-15. Soon, the FDA and CDC will decide whether to extend the authorization to children age 5-11. Studies in younger children are ongoing.

BioNTech became profitable for the first time last December after the FDA first authorized the vaccine. Since then, profits have climbed markedly. But BioNTech stock analysts say the profits peak has already arrived with adjusted earnings of $12.65 per share in the second quarter.

In the third and fourth quarters, analysts expect adjusted BioNTech earnings of $11.55 and $10.24 per share, respectively. Although income would continue to increase year over year, this would represent two quarters of sequential earnings declines. Earnings are also expected to be much lower in mid-to-late 2022.

The Street expects a similar trajectory for revenue, with sales declining from a June 2021 peak at $5.63 billion to below $4 billion in the June and September 2022 quarters.

Strongly Rated Biotech Stock

Despite the stock chart volatility, BioNTech stock still holds a best-possible Relative Strength Rating of 99, according to IBD Digital. This puts shares in the leading 1% of all stocks in terms of 12-month performance.

Shares also have a strong Composite Rating of 96, which weighs a stock’s fundamental and technical measures against all other stocks. So, BioNTech stock ranks in the top 4% on those measures.

Rival coronavirus maker Moderna (MRNA) is also coming under pressure. After flirting with an early entry last Thursday, MRNA stock fell on Friday and Monday. Tuesday afternoon, Moderna stock was trading down 5.2% to 387.50, below its 50-day line.

Follow Allison Gatlin on Twitter at @IBD_AGatlin.

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