NVAX Surges After Analyst Calls Covid-19 Vaccine "Best-in-Class"

The equity sports a more than 2,700% year-over-year lead

Digital Content Manager
Jan 29, 2021 at 10:34 AM
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Novavax, Inc. (NASDAQ:NVAX) is the latest pharmaceutical stock racing to the Covid-19 vaccine finish line, after late-stage trials showed its candidate is more than 89% effective in protecting against the virus, and nearly as effective against the new strains found in the United Kingdom and South Africa. In turn, the company received a price-target hike from J.P. Morgan Securities to $295 from $215 this morning, with the firm noting this recent data positions NVAX's vaccine as "best-in-class" among other candidates. At last check, shares were up 30.8% at $176.99, after earlier surging to a nearly six-year high of $205.13. Analysts were bullish toward the equity coming into today, with five of the seven in coverage carrying a "strong buy" rating, and only two saying "hold" or worse.

Prior to today's pop, shares had been cooling off from an Aug. 5 peak near the $189 level. Over the past few months, the security struggled with fierce overhead pressure at the $140 mark, though on the flip side, support at the 40-day moving average contained a number of pullbacks. Longer term, NVAX sports an astounding 2,700% year-over-year lead. 

It seems like shorts sellers are starting to hit the exits, too. Short interest dropped 4.9% in the most recent reporting period, and now the 6.97 million shares sold short account for a hefty 29.7% of the stock's available float, or nearly two days' worth of pent-up buying power.

A shift in the options pits could keep the wind at the equity's back. This is per Novavax stock's 10-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 81% of readings from the past year. This means puts are being picked up at a quicker-than-usual pace. 

Drilling down to today's options activity, 15,000 calls and 12,000 puts have already crossed the tape, which is 11 times what is typically seen at this point. Most popular is the monthly February 120 put, followed closely by the (expiring) weekly 1/29 170-strike call. 

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