UPDATE: BofA Securities Initiates Novavax (NVAX) at Underperform
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BofA Securities analyst Alec Stranahan starts coverage on Novavax (NASDAQ: NVAX) at Underperform, PT $35.00.
The analyst comments "We initiate coverage of Novavax with an Underperform rating. NVAX shares (-59% YTD; NBI: -22.4%) have seen a meaningful reversion from Sept. 2021 highs (~$270/sh) on a backdrop of tempered expectations in COVID-19 and seasonal flu, along with broader sector weakness. Despite the recent pullback, we see room for shares to trade lower still, with our longer-term Nuvaxovid expectations meaningfully below consensus (~$1.2B in 2024+; -$800M consensus) given our bearish view on continued C-19 booster use, unclear benefit as a heterologous option, and waning immunity against new variants (i.e., Omicron). Resolution on approvability in flu, RSV, and malaria are also still open questions, with these markets becoming increasingly crowded and emerging competitor data looking strong relative to what Novavax has shown. Together, our SOTP NPV (sum of the parts net present value) analysis yields a PO of $35/sh on what we would consider non-conservative estimates (strong near-term Nuvaxovid sales, 60% probability of approval in flu), warranting our Underperform rating."
Shares of Novavax closed at $58.43 yesterday.
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