BofA Upgrades Moderna (MRNA) to Neutral on 'More Reasonable Valuation'; UBS Starts at Neutral

BofA analyst Geoff Meacham upgraded shares of Moderna (NASDAQ: MRNA) to Neutral from Underperform and raised the price target to $180.00 per share from the prior $135.00.

The analyst sees a “more reasonable valuation” after recent weakness in MRNA shares although he still believes Pfizer (NYSE: PFE) is “better positioned given what should be a bullish outlook for Paxlovid.”

“We’ve been bearish on MRNA shares for some time based on what we thought were overly optimistic Street assumptions on C-19 boosters. As valuation has compressed (last 4 months: -65%; NBI index: -21%) and as we move from pandemic to endemic stages, we are focusing more on the pipeline beyond Spikevax. Bulls previously called Moderna the “Tesla of Biotech”, which meant that the stock narrative over-ruled valuation assumptions but now, the latter looks more reasonable. As a result, we think the risk/reward in MRNA shares is more favorable, considering Moderna’s leadership position in mRNA technology, its advancing pipeline (which should have a number of good updates in 2022) and the strategic optionality that >$17B in cash provides,” Meacham said in a client note.

The analyst projects 4Q Spikevax sales above the current consensus of $6.56 billion, but below the consensus on 2022/2023 sales.

UBS analyst ​​Eliana Merle started research coverage of Moderna with a Neutral rating and a $210.00 per share price target.

Overall, the analyst sees Moderna as “a disruptive force in the $35B+ global annual vaccine market (beyond COVID-19).”

“We think MRNA's platform has significant applications beyond COVID-19, but that current levels reflect this potential based on the science to date. In the near-term, we think COVID-19 remains the key focus and a source of near-term volatility for shares. We see some potential further headwinds for shares amidst the uncertainty as COVID-19 transitions from a pandemic to endemic disease. Long-term, we think the success of COVID-19 vaccines suggests a high likelihood of success for other vaccine targets and we see this as a growth driver in the medium to longer term, but we think COVID-19 to remain focus for shares in '22,” Merie wrote in a client note.

Moderna stock is down 0.9% in pre-market today.

By Senad Karaahmetovic | [email protected]

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