What happened
Two prominent U.S. coronavirus stocks ended the week on a down note. Pfizer (PFE 1.60%) and Johnson & Johnson (JNJ 0.76%) both fell on the day by nearly 3%. This followed a prominent investment bank's rather lukewarm take on their current prospects.
So what
Goldman Sachs analyst Chris Shibutani initiated coverage on Pfizer and Johnson & Johnson on Friday, tagging both high-profile healthcare industry stocks with neutral recommendations.
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Shibutani is concerned with what he considers to be Pfizer's somewhat cloudy future, despite the great success of the Comirnaty coronavirus vaccine it developed with German biotech BioNTech.
"Our views on [Pfizer] come down to that we estimate around one-third of its current valuation is attributed to the COVID-19 vaccine and therapeutic [products], and we feel the trajectory for both remains highly uncertain," he wrote.
As for Johnson & Johnson, the prognosticator feels the stock is also fairly valued. However, he sounded a more optimistic note about the company's potential.
"With [Johnson & Johnson] in the midst of transitions across several domains for the organization ... we see possibilities -- even within an organization of [Johnson & Johnson]'s scale and scope -- for additional potentially disruptive opportunities to develop that could reshape the investment thesis, in our view," he wrote.
Last month, Johnson & Johnson announced plans to spin off its sprawling consumer healthcare division.
Shibutani's price target on Pfizer stock is $51 per share, and that for Johnson & Johnson is $161.
Now what
Pfizer and Johnson & Johnson are certainly heading into some uncertain waters -- both with the coronavirus and, in the latter company's case, the apparently looming spinoff. To my mind, though, the two companies have plenty of strength in numerous product areas outside of their respective vaccines, so investors shouldn't be too discouraged by Goldman Sachs' latest evaluations.
