BofA Securities Downgrades Moderna (MRNA) to Underperform; Hard to Justify Run

February 1, 2021 6:09 AM EST
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Price: $170.81 +6.84%

Rating Summary:
    8 Buy, 6 Hold, 2 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 17 | Down: 13 | New: 41
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(Updated - February 1, 2021 6:36 AM EST)

BofA Securities analyst Geoff Meacham downgraded Moderna (NASDAQ: MRNA) from Neutral to Underperform, PT $150, saying the stock price is increasingly difficult to justify on a fundamental basis.

The analyst comments "MRNA shares continue to run (2020: +425%; YTD: +66% vs NBI index: +6%) attaining levels that are increasingly difficult to justify on a fundamental basis. Indeed, the momentum has continued despite new COVID-19 vaccine data from Novavax and JNJ’s phase 3 study (covered by Bob Hopkins)that should support near-term FDA (and global) approval. We recognize that Moderna (and Pfizer) have best-in-class vaccine efficacy thus far, but volumes and lower price points from Novavax, JNJ, Astra-Zeneca and others should affect cumulative sales expectations from Moderna. Our prior scenario analysis indicated that at share prices >$180, Moderna must generate >$85B in cumulative COVID-19 sales to justify valuation, which appears to be reflected at current levels. Indeed, our $150 PO already implies significant mRNA-1273 upside at $47B over the next 10 years, concentrated primarily in 2021-2023. Moreover, consensus forecasts assume vaccine sales of >$5B through 2030, which in our view is unrealistic. 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. As a result, we are downgrading to Underperform and maintaining our $150 PO."

For an analyst ratings summary and ratings history on Moderna click here. For more ratings news on Moderna click here.

Shares of Moderna closed at $178.25 yesterday.

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