Deutsche Bank Starts Moderna (MRNA) at Sell
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(Updated - October 22, 2021 6:06 AM EDT)
Deutsche Bank analyst Emmanuel Papadakis initiates coverage on Moderna (NASDAQ: MRNA) with a Sell rating and a price target of $250.00.
The analyst comments "Moderna is a concept company that has ridden a wave of disruptive innovation, pandemic serendipity and management vision (plus a little public funding) to become a concept stock. Whilst execution has not been lacking, the strategic discipline to stay focused on mRNA is a virtue and we concur there is potential to disrupt dynamics in the broader viral infectious disease arena (e.g. flu) but, all that looks more than generously reflected in a valuation that looks detached from a problematic assessment of reality. Even with YE21 net cash likely approaching $20bn (and $30bn+ in YE22...) the company would need to either sustain COVID vaccine revenues in the DD$bns and/or supplant them with revenue streams of similar magnitude (plus sustain margins >60%) long-term in order to justify current valuation, let alone provide meaningful upside. We consider that improbable and at some point during 2022 a waning COVID vaccine outlook is likely to focus minds on
the realistic durability of COVID endemic potential and the value of the remaining programmes and platform. We note the company has pointed to flu, RSV, CMV and EBV as opportunities of that magnitude but that is a blue sky (market) scenario in our view and it will not be a monopoly: multiple conventional competitors are also addressing those opportunities, sleeping giants (GSK/SAN, etc) have now woken up to the potential of mRNA and are investing to compete accordingly, whilst PFE/BNTX will remain key competitors. We initiate at Sell, PT$250, based on our $100bn base case DCF of which COVID constitutes 1/3 with the pipeline and platform equal parts of the remainder (a mix consistent with both our BNTX and COVID market models)."
Shares of Moderna closed at $339.57 yesterday.
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