Morningstar says CSL, Cochlear won't be impacted by vaccine sceptic RFK Jr's role
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The news: Morningstar says that the prospect of vocal vaccine sceptic Robert F Kennedy Junior leading the US Health Department under US President-elect Donald Trump does not change its long-term views on ASX biotech majors CSL and Cochlear.
The numbers: Morningstar reiterated its fair value estimates of $310 for CSL and $225 for Cochlear.
CSL was trading 1.2% lower at $278.80 by 2:30pm AEDT, while Cochlear fell 0.9% to $291.90. Both were performing better than the wider healthcare sector (-1.7%) and the ASX 200 index (-1.9%).
The context: Morningstar analyst Shane Ponraj said that CSL shares are undervalued, despite slumping last month on concerns that the upcoming Trump administration may be negative for the company's influenza vaccine business, which makes up roughly 15% of group earnings.
Ponraj believes the influenza vaccine market will be "largely unaffected".
Meanwhile, Ponraj noted that shares in Cochlear remain overvalued, with current earnings growth rates unlikely to be maintained.
However, recent comments by both Trump and RFK Jr against childhood vaccination programs could "relieve some pressure on the company", the analyst said, with Cochlear facing potential competition for its hearing devices from biotech rival Moderna as it trials a potential vaccine against cytomegalovirus, which can cause hearing loss in newborn babies.
The source: Morningstar research
