Coronavirus vaccine developer Moderna Inc's MRNA stock was moving lower Monday after a downgrade from BofA Securities.
The Moderna Analyst: Geoff Meacham downgraded Moderna shares from Neutral to Underperform and maintained a $150 price target.
The Moderna Thesis: Moderna shares have seen an extended rally, rising 425% in 2020 and an incremental 66% year-to-date, Meacham said in a Monday note.
The shares have now catapulted to levels that are increasingly difficult to justify on a fundamental basis, the analyst said.
The gains have come despite rival vaccine candidates from Novavax, Inc. NVAX and Johnson & Johnson JNJ moving toward approval by the FDA in the near term, he said.
The Moderna and Pfizer Inc. PFE-BioNTech SE – ADR BNTX vaccines may have best-in-class efficacy, but the volume and lower price points from Novavax, J&J, AstraZeneca plc AZN and others will likely affect cumulative sales expectations for Moderna, Meacham said.
For supporting a valuation over $180, Moderna should generate more than $85 million in cumulative COVID-19 vaccine sales, the analyst said, adding that this is reflected in the share price at current levels.
BofA's $150 price target already implies significant mRNA-1273 upside at $47 billion over the next 10 years, concentrated primarily in 2021-2023, he said.
Additionally, consensus expectations for Moderna's vaccine sales are unrealistic, Meacham said.
"These factors, together with a pipeline that is still too early to compensate for declining vaccine sales (CMV launch in 2024e), creates an unfavorable setup for MRNA shares."
MRNA Price Action: At last check, Moderna shares were slipping 8.99% to $157.60.
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