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Moderna Analyst: Coronavirus Vaccine Will Get Approved, Clock $5B+ In Orders Over Next Few Years

July 13, 2020 12:30 pm
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Moderna Analyst: Coronavirus Vaccine Will Get Approved, Clock $5B+ In Orders Over Next Few Years

Moderna Inc (NASDAQ:MRNA) shares are surging above the $70 level for the first time since late May following sell-side commentary on its coronavirus vaccine program.

The Moderna Analyst: Jefferies analyst Michael Yee initiated coverage of Moderna with a Buy rating and $90 price target.

The Moderna Thesis: There is good probability the vaccine will work and get at least emergency approval by early 2021, Yee said in a note, citing his discussions with key opinion leaders and disclosures made by the company thus far.

Given the likelihood of demand to remain elevated in the first two years, the analyst estimates billions in sales. This is despite the sell-side remaining divided over whether Moderna will be successful in its pursuit for a coronavirus vaccine, he added.

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Key catalysts for the stock are the Phase 2 readout due in fall and potential interim Phase 3 readout by the end of the year, Yee said.

Jefferies' $90 per share price target gives Moderna a valuation of $35 billion. This is based $15 billion valuation for the stock, based on three-to-four times sales, and $15 billion to $20 billion platform value, which is supported by a pipeline consisting of 15 other candidates in the clinic, including 5-10 vaccines and 5-19 other therapeutic programs.

"$35B on MRNA if it does have a novel mRNA platform that generated a COVID vaccine in less than a year would be worthy of praise, in our view," Yee wrote in the note.

As such, the firm believes the vaccine will get approved and could do over $5 billion in orders over the next few years and the stock will head higher.

MRNA Price Action: Moderna shares were soaring 16.8% to $73.14 at the time of publication.

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