The stock market has been on a rough ride amid multi-year-high inflation, the Fed’s tightening policies, and geopolitical tensions. Furthermore, the resurgence of COVID-19 cases in China and elsewhere and the emergence of newer variants are raising concerns over deepening supply chain disruptions, adding fuel to the market’s volatility. The market’s volatility has led to a decline in the valuation of several fundamentally sound stocks.
Blue-chip stocks, which are popular among investors for their resilience, could be a strategic investment in the current environment. These stocks have a history of weathering market downturns and bouncing back. Blue-chip companies tend to offer more stable, predictable returns amid such market swings.
Thus, we think it would be wise to bet on oversold blue-chip stocks Moderna, Inc. (MRNA), Intel Corporation (INTC), and Biogen Inc. (BIIB).
Moderna, Inc. (MRNA)
MRNA in Cambridge, Mass., is a biotech company that develops vaccines and therapeutics for infectious diseases, immuno-oncology, rare diseases, autoimmune and cardiovascular diseases, independently and through strategic collaborations. It develops technologies that enable the development of mRNA medicines for diverse applications.
On April 19, MRNA announced that its first bivalent booster vaccine candidate (mRNA-1273.211) demonstrated superior neutralizing titers versus mRNA-1273 against all variants, including omicron. Its superiority continued for six months after a booster for the beta and omicron variants. If authorized, this new booster candidate should add significantly to the company’s revenues. In March, MRNA received approval from the FDA for the emergency use of a second booster dose of its COVID-19 vaccine (mRNA-1273).
On April 7, the company collaborated with IAVI to employ mRNA technology to tackle broad global health threats. The company intends to leverage its mRNA technology and IAVI’s discovery and development expertise to address persistent diseases like HIV/AIDS, tuberculosis (TB), antimicrobial-resistant enteric infections, and COVID-19.
During the fourth quarter, ended Dec. 31, 2021, MRNA’s total revenue increased 1,162.9% year-over-year to $7.21 billion. Its operating income rose 2,067.3% from its year-ago value to $5.41 billion. The company’s net income increased 1,889.7% year-over-year to $4.87 billion, while its EPS grew 1,736.2% from the prior-year quarter to $11.29.
MRNA is relatively undervalued compared to its peers. The stock’s 2.61 forward Price/Sales multiple is 47.8% lower than the 4.99 industry average. Its 1.96 forward EV/Sales multiple is 52% lower than the 4.09x industry average. In addition, its 3.07 forward EV/EBITDA ratio is 78% lower than the 13.98 industry average.
The $6.14 consensus EPS estimate for its fiscal first quarter (ended March 31, 2022) represents a 116.1% improvement year-over-year. The $4.80 billion consensus revenue estimate for the about-to-be-reported quarter indicates a 147.6% increase from the same period last year. The company has an impressive earnings surprise history; it surpassed the consensus EPS estimates in three of the trailing four quarters. Over the past three months, the stock has declined 9.7% in price to close its last trading session at $144.50.
MRNA’s POWR Ratings reflect this promising outlook. The company has an overall B rating, which translates to Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
MRNA has an A grade for Value and Quality and a B grade for Growth. Within the Biotech industry, it is ranked #20 of 401 stocks.
To see additional POWR Ratings for Momentum, Sentiment, and Stability for MRNA, click here.
Click here to checkout our Healthcare Sector Report for 2022
Intel Corporation (INTC)
INTC in Santa Clara, Calif., is a leading provider of computer products and technologies. It operates through six segments: Client Computing Group (CCG); Data Center Group (DCG); Internet of Things Group (IOTG); Mobileye; Non-Volatile Memory Solutions Group (NSG); and Programmable Solutions Group (PSG).
On April 13, the company announced its plans to achieve net-zero greenhouse gas emissions in its global operations by 2040. Such targets demonstrate its commitment to sustainable business practices.
On March 15, INTC invested more than €33 billion ($35.6 billion) in semiconductor R&D and manufacturing in the European Union. Such investments should aid the company in expanding its business and market reach.
On March 31, INTC agreed to acquire Granulate Cloud Solutions Ltd. With this acquisition, the company expects to maximize workload performance and reduce cloud costs.
INTC’s non-GAAP net revenue increased 2% year-over-year to $74.72 billion in its fiscal 2021 (ended Dec. 25, 2021). Its non-GAAP net income grew 4% from its year-ago value to $22.36 billion, while its non-GAAP EPS increased 7% from the year-ago value to $5.47.
INTC looks undervalued at its current price. In terms of forward non-GAAP P/E, INTC is currently trading at 13.79x, which is 27.8% lower than the 19.09 industry average Its 2.57 forward Price/Sales multiple is 19.1% lower than the 3.17x industry average. In addition, the stock’s forward Price/Cash Flow and EV/EBITDA ratios of 7.07 and 6.92, respectively, compare with the 18.66 and 12.71 industry averages.
For its fiscal second quarter (ending June 30, 2022), INTC’s revenue is expected to increase 0.2% year-over-year to $18.58 billion. It is no surprise that the company has surpassed the consensus EPS estimates in three of the trailing four quarters. The stock has gained marginally in price over the past five days to close the last trading session at $47.50.
INTC’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which equates to a Strong Buy in our POWR Ratings system. INTC also has a B grade for Value, Sentiment, and Quality. The stock is ranked #9 of 96 stocks in the Semiconductor & Wireless Chip industry.
Click here to see the other ratings of INTC for Growth, Stability, and Momentum.
Click here to checkout our Semiconductor Industry Report for 2022
Biogen Inc. (BIIB)
Cambridge, Mass.-based BIIB discovers, develops, manufactures, and delivers therapies for treating neurological and neurodegenerative diseases. It offers TECFIDERA, AVONEX, PLEGRIDY, and FAMPYRA for the treatment of MS; SPINRAZA for SMA treatment; ADUHELM for the treatment of Alzheimer’s; and FUMADERM for the treatment of severe plaque psoriasis.
On April 20, BIIB sold its equity stake in a biosimilar joint venture to Samsung Biologics for $2.3 billion. The company plans to pursue further biosimilar opportunities for healthcare sustainability.
On February 7, BIIB and Xbrane Biopharma AB (XBRANE) agreed to produce and commercialize Xcimzane to treat rheumatoid arthritis. Such introductions should expand the company’s biosimilars pipeline.
In the fourth quarter, ended Dec.31, 2021, BIIB’s income from operations increased 277.6% year-over-year to $587.10 million. Its non-GAAP net income improved 410.6% from the year-ago value to $500.40 million, while its non-GAAP EPS came in at $3.39, representing a 422.9% year-over-year improvement.
BIIB is trading at a discount to its peers. The stock’s 14.20 forward non-GAAP P/E multiple is 32.3% lower than the 20.98 industry average. Its 3.25 forward Price/Sales multiple is 34.8% lower than the 4.99x industry average. In addition, BIIB’s forward Price/Cash Flow and EV/EBITDA ratios of 11.30 and 10.14, respectively, are significantly lower than the 18.76 and 13.98 industry averages.
Analysts expect BIIB’s EPS to increase 4.4% year-over-year to $16.05 in its fiscal year 2023 (ending Dec. 31, 2023). BIIB has surpassed the consensus EPS estimates in each of the trailing four quarters. Shares of BIIB have gained 5.6% in price over the past month.
The company has an overall B rating, which translates to Buy in our proprietary rating system. It is no surprise that BIIB has an A grade for Value and a B grade for Growth and Quality. In the Biotech industry, it is ranked #10 of 403 stocks.
Beyond what we have stated above, we have also given BIIB grades for Stability, Sentiment, and Momentum. Get all the BIIB ratings here.
Click here to checkout our Healthcare Sector Report for 2022
MRNA shares were trading at $143.51 per share on Friday morning, down $0.99 (-0.69%). Year-to-date, MRNA has declined -43.50%, versus a -8.76% rise in the benchmark S&P 500 index during the same period.
About the Author: Shweta Kumari
Shweta's profound interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make educated investment decisions.
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