A Bull Market Is Here: Buy 2 Great Stocks Down 30% or More

A bull market is underway. The S&P 500 has risen almost 30% in the past year, but not all stocks have benefited. However, two Motley Fool contributors think they've found great stocks 30% or more below their 52-week highs to purchase now.

Pfizer had a 34% 12-month drop. Adria Cimino (Pfizer): Pfizer (NYSE: PFE)'s coronavirus vaccination and therapy made it a pandemic stock market star. These goods helped the corporation attain record $100 billion in annual revenue.

Demand has dropped, and the company's profitability aren't as strong. It hasn't helped that some of its blockbuster pharmaceuticals may lose exclusivity later this decade. But this black cloud has a bright side. In-house product development and a big purchase may help Pfizer enter a new growth era.

Last year, Pfizer approved a record number of products. The company received nine approvals for new molecular entities and permission to increase product indications. These efforts should pay off soon and later. Pfizer anticipates $20 billion in income from additional approvals by 2030. This should more than offset the $17 billion the corporation expects to lose from earlier product patent expirations.

By acquiring Seagen, Pfizer has also shifted its attention to cancer. Pfizer added four approved oncology drugs with Seagen. This offers it four priority-indication launches, seven planned phase 3 data readouts, and six possible phase 3 study launches during the first half of next year.

Pfizer expects eight or more blockbusters from its cancer strategy by the end of the decade. So the oncology gamble is large and might enhance Pfizer's earnings and share price in the coming months and long term.

The stock price of Pfizer has declined almost 30% in the past year, to 12x projected earnings expectations. With its surge of new drugs and Seagen's ability to provide marketed products and research and development experience, Pfizer stock appears cheap today.

Moderna had a 35% 12-month drop. Moderna's Keith Speights: The same COVID-19 headwinds that afflicted Pfizer also hurt Moderna. Nearly 30% of vaccine producer shares have fallen in the past year. Finally, I think Moderna is a great stock to buy.

On May 12, 2024, the FDA will decide whether to approve Moderna's respiratory syncytial virus (RSV) vaccine mRNA-1345. I expect the FDA to approve mRNA-1345. When it meets in late June, the U.S. CDC Advisory Committee on Immunization Practices (ACIP) will likely recommend the RSV vaccination.

Moderna will compete with Pfizer and GSK in the RSV market, where both have FDA-approved vaccines. All three businesses should be able to win. Moderna's pre-filled mRNA-1345 syringes could challenge the two larger drugmakers by saving pharmacists and doctors time from administration. Moderna expects organic sales increase in 2025 because to mRNA-1345's expected commercial success. In 2026, the business hopes to break even again.

For the next few years, Moderna's growth driver may not be the new RSV vaccine. Later in 2024, the business expects to submit mRNA-1010, a seasonal flu vaccine. The combination flu/COVID-19 vaccine mRNA-1083, CMV vaccine mRNA-1647, and cancer vaccine mRNA-4157 are potential late-stage studies.

Not guaranteed Pfizer and Moderna may not recover. Either company may face clinical or regulatory delays. If the stock market falls, Pfizer and Moderna stocks may too. However, both COVID-19 vaccine producers' futures look brighter than before.

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