5MRD

Johnson & Johnson Vaccine Candidate Enters Late-Stage Trials

The equity sports attractively priced premiums at the moment

Digital Content Manager
Dec 18, 2020 at 9:33 AM
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Blue-chip pharma giant Johnson & Johnson (NYSE:JNJ) is in focus this morning, after announcing its COVID-19 vaccine candidate entered late-stage trials. The pharmaceutical name said about 45,000 participants are currently enrolled in the trials, and that interim data is expected by the end of January 2021. Should it yield positive results, the company said it will submit an emergency use authorization application to the U.S. Food And Drug Administration (FDA) in February. 

On the charts, Johnson & Johnson stock has had a volatile year so far. Exactly a month after shares dropped to a March 23, four-year low of $109.16, JNJ rallied to an April 23, all-time high of $157. The security has cooled off since hitting that peak, however, and over the past several months had been struggling with overhead pressure at the $154 mark. Year-to-date, the stock is up 5.3%.

Analysts are overly optimistic toward the security coming into today, with 11 of the 14 in coverage sporting a "buy" or better rating, and three carrying a tepid "hold." Plus, the 12-month consensus target price of $167.35 is a 8.5% premium to last night's close.

That optimism is echoed in the options pits, where calls are king. This is per the the security's 10-day call/put volume ratio of 5.28 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 91% of readings from the past year. In simpler terms, calls are being picked up at a quicker-than-usual clip.

Now could be an opportune time to take advantage of the security's next move with options. The stock's Schaeffer's Volatility Index (SVI) of 24% sits in the relatively low 19th percentile of its annual range. This means JNJ currently sports attractively priced premiums.

 

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