It’s Time to Buy BioNTech Shares
Berenberg Bank analysts believe it’s time to buy BioNTech SE (NASDAQ:BNTX) shares, providing key takeaways from their hosted meetings with the company’s management at their annual German conference, followed by a series of investor meetings.
While debates on the longevity of the COVID-19 vaccine sales and growth potential in the rest of the pipeline will persist for some time, the analysts came away with a positive outlook on the company. BioNTech has an aggregate of about €20 billion in cash on the balance sheet, and management is committed to using it to maximize investor return over time. For the long haul, the company aims to become a global immuno-oncology company, underpinned by its leadership in mRNA technology.
According to the analysts, the stock has re-rated based on the apparent ebbing of the COVID-19 pandemic, in addition to the corrections in the broader market. However, at the current valuation, the analysts see a renewed interest in the stock, particularly from a number of large, global long-only funds. The analysts think many investors have started to view the company’s valuation as attractive, given the substantial cash on hand and the potential of its many pipeline products.
| Symbol | Price | %chg |
|---|---|---|
| 207940.KS | 1079000 | 1.02 |
| 068270.KS | 186900 | 1.87 |
| 196170.KQ | 361000 | -2.49 |
| 091990.KQ | 75900 | 0 |
BioNTech SE (NASDAQ:BNTX) Earnings Preview and Financial Health Analysis
BioNTech SE, trading on the NASDAQ under the symbol BNTX, is a biotechnology company known for its work in developing mRNA-based vaccines and therapies. The company gained significant attention for its collaboration with Pfizer in developing a COVID-19 vaccine.
BioNTech competes with other biotech firms like Moderna and CureVac in the mRNA space. BioNTech is set to release its fourth-quarter earnings on March 10, 2025, before the market opens. Analysts expect the company to report earnings per share (EPS) of $0.38, with projected revenue of $1.24 billion.
However, some analysts anticipate a lower EPS of $0.25, a sharp decline from $1.90 in the same quarter last year. Revenue is also expected to drop to $1.15 billion from $1.48 billion a year ago.
The price-to-sales ratio is 7.99, showing investor willingness to pay nearly eight times the company's sales per share. The enterprise value to sales ratio is 4.90, providing insight into the company's valuation relative to its revenue. BioNTech's financial health is mixed.
The company has a low debt-to-equity ratio of 0.013, suggesting minimal debt compared to equity. Its current ratio of 7.33 indicates a strong ability to cover short-term liabilities with short-term assets. The enterprise value to operating cash flow ratio of 9.70 shows how many times the operating cash flow can cover the enterprise value. Recently, the FDA placed a clinical hold on BioNTech's Investigational New Drug application for a malaria vaccine trial, causing a 3.4% drop in share price to $110.83. This development may impact investor sentiment and the company's future prospects. BioNTech plans a conference call and webcast on March 10 to discuss its financial results and provide a corporate update.
BioNTech Stock is Substantially Undervalued
Analysts at Berenberg Bank provided their views on BioNTech SE (NASDAQ:BNTX), stating that the shares are substantially undervalued. The analysts believe the company’s current valuation only captures the COVID-19 vaccine potential, leaving the broad pipeline and technology platform unrecognized.
Near term, the analysts think likely positive news from the variant-adapted COVID-19 vaccine and flu vaccine will support the stock to move towards their price target, which was lowered to $350 from $400 due to model adjustments.
A confluence of evidence suggests SARS-CoV-2 is here to stay, and the analysts believe the COVID-19 vaccine will remain a multi-billion-dollar franchise in the foreseeable future. Their thesis on the longevity of the COVID-19 vaccine business remains unchanged.
What gives them the most confidence is the experts’ opinion at FDA advisory committee meeting last week, according to which the COVID-19 vaccine will need an update ahead of the coming winter season. 80% of protection against hospitalization/death is a bar for success, which the analysts think is easy to overcome. Therefore, they believe the data on the omicron-based vaccine in April is likely to be positive. Their checks with U.S. payers suggest a potential upside in both the volume and the price.
