PreMarket Prep Stock Of The Day: Moderna

Benzinga's PreMarket Prep airs every morning from 8-9 a.m. ET. During that fast-paced, highly informative hour, traders and investors tune in to get the major news of the day, the catalysts behind those moves and the corresponding price action for the upcoming session.

On any given day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick along with producer Spencer Israel.

It is not uncommon for Wall Street analysts to make ratings changes in an issue following an earnings report.

Once they have more fundamental information on the company, analysts attempt to reevaluate its true value.

Not one but two Wall Street analysts lowered their ratings on Moderna Inc. MRNA, which is the PreMarket Prep Stock of the Day.

The Company: Moderna is a commercial-stage biotech that was founded in 2010 and had its initial public offering in December 2018. The firm's mRNA technology was rapidly validated with its COVID-19 vaccine, which was authorized in the United States in December 2020. Moderna had 24 mRNA development programs as of early 2021, with 13 of these in clinical trials.

Moderna's Pandemic Price Action: Moderna is one of the biggest winners in the U.S. markets since the pandemic rocked Wall Street last year.

Savvy inventors who recognized the potential of Moderna's mRNA technology could have purchased shares under $20 when the stock bottomed last March at $19.31. Interestingly, on a technical note, that was above its prior two months' lows ($17.68 and $17.91), exhibiting excellent relative strength in a market that was caving in.

Following Thursday’s second-quarter report, the issue made a new all-time high at $443.99, but did not make a new all-time closing high, as the close ($416.26), was shy of Wednesday’s close ($419.05).

From the March low to Thursday’s high is a gain of 2,200%.

Moderna's Q2 Report: Before the open Thursday, the company reported quarterly earnings of $6.46 per share, which beat the analyst consensus estimate of $6.04 by 6.95%.

This is a 2,183.87% increase over losses of 31 cents per share from the same period last year. The company reported quarterly sales of $4.4 billion, which beat the analyst consensus estimate of $4.28 billion by 2.8%.

This is a 6,500% increase over sales of $66.35 million the same period last year.

The Moderna Downgrades: Before the open on Friday, two firms downgraded the issue.

Piper Sandler downgraded Moderna from Overweight to Neutral and raised the price target from $246 to $445. That would have been good information for Thursday’s session, when it peaked at just under that level.

Oppenheimer lowered its rating on the issue from Outperform to Perform.

Barclays maintained its Overweight rating on the issue and raised its price target from $194 to $463.

I'm not quite sure what good the price target raise does now for investors, as the original target was over $200 lower than Thursday’s close.

MRNA Price Action: Moderna stock had a tame day Friday.

As of 2:30 p.m. EST, its current range of $25.65, is well below Thursday’s range ($40.99) as well as its nine-day average true range of $28.70.

The stock ended the session lower by 0.61% at $413.72. 

Moderna Technical Take: The downgrades have inflicted some minor technical damage for now. There are two potentially concerning items that investors in the issue should take note of. First of all, the high for the session is just above Moderna's all-time closing high ($419.26 vs. $419.05). That may be an indication some larger players in the issue are attempting to exit at the best daily mark on the books.

Also, the issue has put in a lower low from Thursday’s session ($393.61 vs. Thursday’s low of $403). That may be an indication of shareholders not being opposed to selling into weakness as opposed to selling into strength.

Moving forward, investors long the issue should note whether or not the issue can post another all-time closing high, which just happens to be right at the current high for the session.

Posted In: PreMarket PrepEarningsNewsTechnicalsTrading Ideas