November 16th, 2022 | 13:30 CET
BioNTech, Meta Materials, and Amazon - Industry leaders belong in the portfolio
Table of contents:
BioNTech - Full pipeline
BioNTech is a leader in the field of corona vaccines. The Mainz-based Company was the first to bring a vaccine to market with its mRNA technology. Since then, the active ingredient Comirnaty has been the Company's cash cow. News surrounding corona protection continues to largely dominate the news, such as on November 10, when the CHMP issued a recommendation for booster vaccination against the Omicron BA.4/BA.5 variant for children ages 5 to 11. On November 14, the Company purchased a manufacturing facility from Novartis in Singapore. In the future, mRNA vaccines for the Asian market will be produced there.
But the Mainz-based company has long been working on the next blockbuster. It is investing the profits from vaccine production in the development of new therapy options, including against cancer. As early as 2023, there should be up to 10 results from the ongoing studies. A look at the Q3 numbers shows that both revenues and profits are down. After the Corona situation calmed down, demand declined. In the last quarter, revenues were around EUR 3.5 billion, with profits of around EUR 1.8 billion. Nevertheless, management expects to achieve the forecasts or end up at the upper end of the range. The Company has high hopes for the new Omicron vaccine.
Since October 21, the share price has started to form an upward trend. Currently, the stock is trading at EUR 154.15. Following the quarterly figures, analysts at Goldman Sachs have issued a Hold rating with a price target of USD 177. Berenberg, on the other hand, takes a much more positive view of the share and has issued a Buy recommendation with a price target of USD 312. Positive study results are already priced in here. The road to the finished product is still long in the case of cancer vaccines. The Company is making the most progress with the flu vaccine, where the clinical trial is already in phase 3.
Meta Materials - Growth continues in the 3rd quarter
Meta Materials has managed to transfer high-performance functional materials and nanocomposites (metamaterials) from the laboratory to mass production using a roll-to-roll process. This significantly reduces the cost to a few dollars per square meter. The metamaterials are given properties that they do not naturally have. Depending on customer requirements, samples are developed using artificial intelligence. As a result, customer-specific solutions can be created within days. The application areas are broadly diversified and range from 5G to electric vehicles, medicine, Internet-of-Things, energy and aerospace.
On November 1, a collaboration with DuPont Teijin Films and Mitsubishi Electric Europe was announced with the goal of a safer and more efficient lithium-ion battery. In the process, Meta Materials' PLASMAfusion copper foil is said to reduce weight and cost. At the same time, the battery's energy efficiency, range and safety are to be increased. That is just one megatrend that could benefit from Meta Materials patents. The Company's Q3 numbers also show that it is making progress in commercializing its technologies. Revenue increased 329% YOY to USD 2.45 million. For the first 9 months, revenues climbed as much as 388%. However, the Company is still in the red due to its investments. There was a loss of USD 0.07 per share.
On the other hand, the Company owns 292 granted patents. A total of 472 patents are currently filed. The customer and partner list is also impressive. It includes illustrious names such as Samsung, Sony, Panasonic, Airbus, Boeing, Mitsubishi Electric, Mazda, Covestro and many more. A company presentation can be found on the International Investment Forum YouTube channel. The stock, which once traded at USD 21.76 last year due to Facebook's renaming to Meta, was under pressure until early October, marking its low at USD 0.63. Subsequently, it went up more than 180%. Currently, one pays USD 1.69 for a share certificate. Even a single breakthrough should lead to a revaluation of the share.
Amazon - Job cuts and cost reduction
Amazon is the top dog in e-commerce. In the beginning, Amazon mainly shipped books, but today the online giant offers almost everything. In addition, the product range is constantly being expanded. The Prime subscription model gives users free shipping and access to PrimeVideo, the streaming platform, PrimeReading, Amazon Music, PrimeGaming and other features. Most recently, many e-commerce companies suffered significant losses as rising inflation and recession fears dampened consumer sentiment significantly.
Experts believe the e-commerce sector will continue to grow slower than during the pandemic. According to various media reports, Amazon will cut around 10,000 jobs. Amazon wants to cut costs and thus begin to improve its numbers. Amazon already expects a weak 4th quarter due to clouded consumer behavior. But there are not only savings. Currently, a virtual health service called AmazonClinc is being tested in 32 states in the US.
As the industry leader, Amazon is expected to gain further market share. Whether this will dispel investor skepticism remains to be seen. At its peak, the stock has lost almost 50% since the beginning of the year. The low was USD 85.87. Currently, the share is climbing and is now at USD 103. After the last quarterly figures, in which the profit declined although sales increased, there were hailings of buy recommendations for the stock from Credit Suisse, RBC and Jeffries. The price targets are between USD 135 and USD 142. Thus, the share has a good 30% upside potential.
All three companies are industry leaders. While Amazon and BioNTech are already making money, the growth company Meta Materials is still in the red, but sales are already rising sharply. A single breakthrough should take the share into the black. Meta Materials is an interesting portfolio addition next to the established industry leaders.
Conflict of interest
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