5 Stocks That Could Directly Gain From Pfizer's Vaccine Success

Pfizer Inc. PFE and BioNTech SE BNTX have started distribution of the COVID-19 vaccine in the United States following its approval for emergency use from the FDA. Notably, the companies mentioned in a press release that they plan to deliver 200 million doses of the vaccine by Jul 31, 2021, after entering into an agreement with the U.S. government for an additional 100 million doses. However, the distribution of the vaccine is a complex logistics process and both the companies mentioned in a fact sheet that they are working closely with the U.S. government to ensure the same.

The vaccine developed by Pfizer-BioNTech requires ultra-low temperatures for distribution and storage and hence, they are making use of the cold chain process to distribute it. Such a situation is sure to benefit companies that are directly involved in this logistics process. Notably, per the fact sheet, Pfizer-BioNTech are making use of the road and air modes of transport for distribution of the vaccine in the United States. In fact, the International Air Transport Association (“IATA”) estimated in a press release on Nov 24 that global cargo volumes are set to grow in 2021 considering the important role it will play in vaccine distribution. Notably, IATA estimates cargo volumes to grow to 61.2 million tons in 2021 from an expected 54.2 million tons in 2020.

Meanwhile, Pfizer has developed temperature-controlled thermal shippers that make use of dry ice to maintain the recommended temperature for storage, “-70°C±10°C for up to 10 days unopened.” Additionally, “GPS-enabled thermal sensors” are being used to track the location and temperature of the vaccine shipments at all times.

The fact sheet further stated that once the vaccine reaches a point of use (“POU”), commercially available ultra-low-temperature freezers can be used to store the vaccine for up to six months. Alternatively, it can also use the thermal shippers that the vaccine arrives in by refilling them with dry ice “every five days for up to 30 days of storage.” Following this, the vaccination centers can transfer the vials to 2-8°C storage conditions and store it for five more days. Hospitals can make use of refrigeration to store the vaccine for five days at a temperature range of 2-8°C.

Hence, the distribution process bodes well for companies that play a role in it. Notably, the distribution of the vaccine is dependent on dry ice manufacturers, freezer box manufacturers and delivery services companies to ultimately reach the POU. Moreover, per a Thomasnet.com article on Dec 14, the sourcing for ultra-low-temperature freezers on their platform was up 522% on a year-over-year basis and 464% compared to the third-quarter figures.

5 Stocks to Watch Out For

With the distribution of the COVID-19 vaccine picking up in the United States, companies that are directly involved in the logistics process stand to benefit. This makes it prudent to keep an eye on stocks that can make the most of this development going forward. Notably, we have selected five such stocks that carry a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

FedEx Corporation FDX provides transportation, e-commerce, and business services worldwide. The company currently has a Zacks Rank #1. The Zacks Consensus Estimate for its next-year earnings increased 8.9% over the past 60 days. The company’s expected earnings growth rate for next year is 9%.

United Parcel Service, Inc. UPS provides letter and package delivery, specialized transportation, logistics, and financial services in the United States. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its next-year earnings increased 4.8% over the past 60 days. The company’s expected earnings growth rate for next year is 8.6%.

Trane Technologies plc TT provides climate control solutions for buildings, homes, and transportation. The company offers hybrid and non-diesel transport refrigeration, and ice energy storage solutions; indoor air quality; and industrial refrigeration products, among others. It markets and sells its products under the American Standard, Nexia, Thermo King and Trane brands through sales offices, distributors and dealers in the United States. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its next-year earnings increased 7.9% over the past 60 days. The company’s expected earnings growth rate for next year is 17.2%.

Carrier Global Corporation CARR provides heating, ventilating, and air conditioning, refrigeration, fire, security, and building automation technologies worldwide. Under the Refrigeration segment, the company offers transport refrigeration products and services, including refrigeration and monitoring systems for trucks, trailers, shipping containers, intermodal, and rail; and commercial refrigeration solutions. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its next-year earnings increased 7.5% over the past 60 days. The company’s expected earnings growth rate for next year is 12.1%.

Linde plc LIN operates as an industrial gas company in North and South America, Europe, the Middle East, Africa, and the Asia Pacific. The company offers oxygen, nitrogen, argon, rare gases, carbon monoxide, carbon dioxide, and so on. Dry ice sales are expected to pick up as hospitals and vaccine centers will require it to store the vaccine. In a way, the company will be in demand since it supplies carbon dioxide which is then converted into dry ice. It currently has a Zacks Rank #3. The Zacks Consensus Estimate for its next-year earnings increased 2.3% over the past 60 days. The company’s expected earnings growth rate for next year is 13.2%.

Zacks Top 10 Stocks for 2021

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Pfizer Inc. (PFE) : Free Stock Analysis Report
 
United Parcel Service, Inc. (UPS) : Free Stock Analysis Report
 
FedEx Corporation (FDX) : Free Stock Analysis Report
 
Trane Technologies plc (TT) : Free Stock Analysis Report
 
Linde plc (LIN) : Free Stock Analysis Report
 
BioNTech SE Sponsored ADR (BNTX) : Free Stock Analysis Report
 
Carrier Global Corporation (CARR) : Free Stock Analysis Report
 
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