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Why Vaccine Mandates Won't Drive Pfizer, BioNTech, and Moderna Stocks Higher

By Keith Speights and Brian Orelli, PhD – Sep 5, 2021 at 7:55AM

Key Points

  • The U.S. has already ordered more than enough COVID-19 vaccines for all Americans.
  • Increased vaccinations resulting from mandates could help reduce the likelihood of further coronavirus mutations.
  • Fewer mutations could lower the need for booster shots in the future.

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There are two key reasons why vaccine stocks won't get a boost from mandates.

Like it or not, more companies are mandating that their employees be vaccinated against COVID-19. In this Motley Fool Live video recorded on Aug. 25, Motley Fool contributors Keith Speights and Brian Orelli discuss why vaccine mandates aren't likely to drive top vaccine stocks Pfizer (PFE 0.28%), BioNTech (BNTX 4.36%), and Moderna (MRNA 0.07%) higher.

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Keith Speights: After the FDA announced its full approval of Pfizer's and BioNTech's COVID-19 vaccine, President Biden urged employers to require their employees to be vaccinated. Moderna is one of the companies that has announced that it's going to require all of its U.S. staff to be vaccinated by October. I think it is, Moderna is going to allow for medical and religious exemptions on a case-by-case basis and I think other companies are taking a similar stance.

But Brian, putting the controversy, and there is controversy about these vaccine mandates. But putting the controversy aside, do you think these mandates could drive these stocks higher -- Pfizer, BioNTech, Moderna. Do you think maybe the mandates could have a positive impact on the stocks?

Brian Orelli: They shouldn't. In fact, I might argue that the mandates make them less valuable. Hear me out here because I'm thinking backwards. But the companies already have contracts to sell the vaccines to the government, and so the government already has these orders for the vaccines and has more orders for vaccines than people in this country, so more vaccinations, because people are doing what they need to do to keep their job doesn't necessarily mean more revenue for the companies.

But if everybody got vaccinated tomorrow, which obviously isn't going to happen, but let's just say they did, then the circulation of the delta variant would become dramatically slower, and with low circulation means lower replication, and with lower replication means that there's a lower chance of developing new mutations that would make the virus even more virulent, which would mean we would need more booster shots. If we don't get those mutations, then we might need less booster shots.

In theory, more vaccinations could theoretically harm the long-term prospects for the vaccines.

Speights: That is really going against the grain of conventional wisdom there, Brian, but what you just said makes sense actually.

Orelli: In reality is that we're only talking about one country and it's a global pandemic. Even if we get it completely under control, it's still going to be replicating in other countries, and therefore have a chance of mutating and becoming a variant.

We used to call the variants not by alpha, beta, gamma, delta, but by the country that then mutation [laughs] occurred in. They're definitely occurring outside the U.S., and so that's going to affect the overall pandemic and might still make boosters necessary.

Speights: Right. That's an important point that this isn't just a US issue and variants. Actually, the variants that have emerged so far have emerged from countries other than the U.S., the ones that have received names anyway.

Of course, this was just a hypothetical question anyway, because not every company is going to mandate vaccines. I think that's highly unlikely. It may be that vaccine mandates really don't matter much to these stocks at all.

Orelli: That's probably reasonable to say that. That definitely doesn't benefit them, but I'm not sure it really hurts them that much, but that was just the counterargument.

Speights: Right. I like it. I like the going outside conventional wisdom kind of thinking, Brian.

Keith Speights owns shares of Pfizer. The Motley Fool recommends Moderna Inc. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Pfizer Stock Quote
$49.35 (0.28%) $0.14
Moderna Inc. Stock Quote
Moderna Inc.
$176.51 (0.07%) $0.11
BioNTech SE Stock Quote
BioNTech SE
$161.60 (4.36%) $6.75

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