Stock market today: S&P 500 climbs as health care, tech gain; Nvidia earnings loom
On Tuesday, Goldman Sachs analyst Chris Shibutani adjusted the price target for Vaxcyte (NASDAQ:PCVX) shares, reducing it to $100 from the previous target of $138. Despite this change, the firm maintained its Buy rating on the stock. According to InvestingPro data, the stock currently trades at $37.76, with analyst targets ranging from $90 to $163, suggesting significant upside potential. The stock maintains a strong Buy consensus with a 1.2 rating (where 1 is Strong Buy). Shibutani’s report followed Vaxcyte’s announcement of Phase 2 topline results for its vaccine candidate VAX-24 in infants, which did not meet the non-inferiority criteria for 4 of the 24 serotypes at post-dose 3, compared to Pfizer (NYSE:PFE)’s Prevnar/PCV20. The results were slightly below the anticipated threshold, where 3 or fewer misses were expected.
The interim results also revealed that the immune response, measured by the IgG geometric mean ratio at post-dose 4, failed to demonstrate non-inferiority for 5 of the 24 serotypes at the mid and mixed doses. Shibutani pointed out the unfortunate timing of these results, which coincided with news regarding FDA leadership changes, adding to the uncertainty in the market.
Despite the disappointing outcome, Vaxcyte is exploring various strategies to enhance the profile of VAX-24, including adjustments in dose formulation. The company announced its intent to move another asset into Phase 3 trials, with the decision to be based on the topline results from the ongoing VAX-31 infant study, expected by mid-2026. InvestingPro analysis shows the company maintains a strong financial position with a current ratio of 12.75 and minimal debt-to-equity of 0.02, providing ample resources for its development programs. Additionally, Vaxcyte signaled its ambition to maintain a strong presence in the pneumococcal conjugate vaccine (PCV) category with the announcement of an XL version of its vaccine.
Goldman Sachs’ revised price target reflects modifications to their financial model, which now includes a more conservative estimate of the risk-adjusted peak market share for VAX-24 in the infant segment. The analyst noted the market’s reaction to the news, with Vaxcyte’s stock price declining by 47.48% in just one week, compared to a 5% decrease in the biotech index XBI. InvestingPro analysis indicates the stock is currently in oversold territory based on RSI, with a "Fair" overall financial health score. The platform’s Fair Value analysis suggests the stock may be undervalued at current levels, with 8 additional ProTips available to subscribers providing deeper insights into the company’s financial position and market performance.
In other recent news, Vaxcyte has announced positive results from its Phase 2 study of the VAX-24 vaccine in infants, showing it to be well-tolerated and eliciting significant immune responses. This study compared VAX-24 to the existing Prevnar 20® vaccine and met non-inferiority criteria for immune response. Vaxcyte plans to advance the mid-dose formulation to a potential Phase 3 program. Meanwhile, Jefferies and Guggenheim have both reiterated their Buy ratings on Vaxcyte, with price targets of $146 and $160, respectively. Jefferies highlighted the positive infant study results of VAX-31, while Guggenheim noted the strong topline data for VAX-24. Mizuho (NYSE:MFG) also maintained an Outperform rating with a $163 price target, emphasizing the company’s resilience amid recent macro political challenges. These developments reflect investor interest in Vaxcyte’s progress in expanding its vaccine portfolio. The company continues to focus on addressing the invasive pneumococcal disease burden, particularly in children under five.
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