Pfizer (NYSE:PFE) has a great new vaccine -- and investors think that's great news for the travel sector.
Pfizer's announcement that its coronavirus vaccine is 90% effective at preventing infection with COVID-19 sent the Dow Jones Industrial Average galloping ahead 1,500 points at the open of trading today. It's proving especially good news for investors in travel-industry stocks: Shares of Marriott International (NASDAQ:MAR) are up 21% in 9:45 a.m. EST trading, while Park Hotel & Resorts (NYSE:PK) is up 40% and travel reservations website owner Expedia (NASDAQ:EXPE) is up 22.5%.
Pfizer's news isn't the only news lifting these stocks today; Deutsche Bank also apparently lifted its price target on Marriott shares by 7%, to $96. But it's clearly the most important news. In Deutsche's analysis, the banker was unable to figure a way to give Marriott a better rating than just "hold" -- even with a vaccine to help it along.
But investors don't care. They're elated with the prospect of a vaccine that's close to 100% effective at preventing the illness that brought global business travel to a standstill earlier this year, and they're betting -- heavily -- that an effective vaccine will make everything well again.
Is that a smart bet to make? In the long term, certainly -- and maybe even in the short term.
With dozens of vaccines in development, I think we always knew that COVID-19 would be beaten sooner or later. Still, the early date of Pfizer's announcement and the astounding rate of efficacy are certainly pleasant surprises. Moreover, Pfizer said today that assuming the data suggests its vaccine is safe as well as effective, it intends to seek emergency use authorization (EUA) for the treatment before the end of this month. According to The Wall Street Journal, this means that distribution could begin in either November or December if EUA is granted.
Pfizer says it will have 50 million doses available by the end of this year, enough to permit the beginning of distribution even with each vaccine requiring two doses to become effective. The company could manufacture as many as 1.3 billion doses per year next year, enough to inoculate America two times over by the end of the year.
It sure sounds to me as if, by the end of 2021, things could start getting back to normal, and the end of the COVID-19 recession could finally be in sight.