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Shares of Smith & Wesson and Sturm Ruger & Co Inc., the two top U.S. manufacturers, fell more than 9%, while Vista Outdoor Inc. - one of the nation’s largest ammunition makers -- fell over 12%, Reuters reported.
|SWBI||SMITH & WESSON BRANDS||17.84||-0.95||-5.06%|
The drop comes as Pfizer said that early results from its coronavirus vaccine suggest the shots may be a surprisingly robust 90% effective at preventing COVID-19, putting the company on track to apply later this month for emergency-use approval from the Food and Drug Administration.
“If a vaccine that is 90% effective can truly bring COVID to an end, the return to work and school could subsequently bring sales in these categories back down to normalized levels,” said Aegis Capital analyst Rommel Dionisio.
Firearms sales surged in recent months amid worries that Joe Biden and the Democratic party would win the presidency and take control of the senate, according to the news organization. Violent protests this year, and fears of civil unrest amid the 2020 presidential election also contributed to the gun buying, reports said.
In August, Mark Oliva, a spokesperson for the National Shooting Sports Foundation, said gun sales have “outpaced last year’s” numbers – and set monthly records – for each month since March.
Sales of sporting goods have also increased this year as the coronavirus pandemic prompted an increase in spending by consumers.
“The confluence of COVID-19 restrictions, civil unrest, calls to defund law enforcement and political figures and courts that are unwilling to hold criminals accountable for their actions are undeniable factors causing Americans to assess their own personal safety and choose to exercise their right of personal protection," Oliva said, at the time.
Shares of Smith & Wesson and Sturm Ruger & Co Inc. had soared 131% and 59%, respectively, in 2020, Reuters reported last month.
Despite their stocks dropping recently, Dionisio predicted that fears of gun control could still fuel another surge in firearms purchases.
Gun stocks weren't the only ones falling after the vaccine news. Peloton Interactive and Zoom Video Communications - two companies that have benefited from consumers staying at home during the pandemic -- both fell more than 14%, according to the news organization.
Fox Business's Stephanie Pagones contributed to this report