Anglo-Swedish drugmaker AstraZeneca (NASDAQ: AZN), announced on July 5, that they will acquire biotechnology firm TeneoTwo. The deal will be worth roughly $1.27 billion, as AstraZeneca seeks to bolster its blood cancer portfolio, as reported by Reuters.
In other news, a judge in Uruguay ordered Pfizer (NYSE: PFE) to provide ‘extensive details’ on the composition of their Covid vaccine along with data showing the safety and efficiency of the vaccine, all that within a short time period.
Meanwhile, the covid pandemic made both of these companies household names, as they profited big from the vaccines. The biggest of them, like the two above, are sitting on substantial cash, which is ready to be deployed, as evidenced by AZN’s acquisition.
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In an inflationary climate, health care stocks, in general, tend to perform well, with AZN and PFE being no exception.
AZN chart and analysis
AZN shares are up over 13% year-to-date, with the biggest gains seen during the March and April trading sessions when tech stocks got annihilated. Currently, the stock trades above all daily Simple Moving Averages (SMAs) staying in the $64 to $67 range in the last week.
Nevertheless, analysts rate the shares a moderate buy, with average next 12-month price predictions at $77.50, 17.51% higher than the current trading price of $65.95.
PFE chart and analysis
PFE stock is down over 7% YTD, which, in a year where most stocks are nurturing large losses, is not a bad performance. On the daily chart, a setup for a double bottom is noted, if the shares reach $46 in the next couple of sessions and bounce off, there could be a reverse of momentum in the share price.
Moreover, analysts rate the shares a moderate buy, predicting that the average next 12-month price will reach $58.64, 12.10% higher than the current trading price of $52.31.
With the coming of the pandemic, vaccine companies had their chance to shine and they made the best of it, producing at record speed vaccines that saved lives.
With the cash infusion, they received from the covid vaccines more mergers and acquisitions (M&A) can be expected, which should further consolidate the sector and strengthen production capacities.
The above two companies possibly represent the cream of the crop, offering investors a wide business moat, plenty of cash on hand, and a proven ability to produce vaccines to prevent pandemics at record speed.
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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
