Moderna Analyst: Unrealistic COVID Vax Expectations Shape Unfavorable Setup

 Coronavirus vaccine developer Moderna Inc's 

MRNA 9.06% stock was moving lower Monday after a downgrade from BofA Securities. 

The Moderna Analyst: Geoff Meacham downgraded Moderna shares from Neutral to Underperform and maintained a $150 price target.

The Moderna Thesis: Moderna shares have seen an extended rally, rising 425% in 2020 and an incremental 66% year-to-date, Meacham said in a Monday note.

The shares have now catapulted to levels that are increasingly difficult to justify on a fundamental basis, the analyst said. 

The gains have come despite rival vaccine candidates from Novavax, Inc. NVAX 21.44% and Johnson & Johnson JNJ 0.25% moving toward approval by the FDA in the near term, he said.

The Moderna and Pfizer Inc. PFE 0.24%-BioNTech SE – ADR BNTX 0.72% vaccines may have best-in-class efficacy, but the volume and lower price points from Novavax, J&J, AstraZeneca plc AZN 0.4% and others will likely affect cumulative sales expectations for Moderna, Meacham said. 

For supporting a valuation over $180, Moderna should generate more than $85 million in cumulative COVID-19 vaccine sales, the analyst said, adding that this is reflected in the share price at current levels.

BofA's $150 price target already implies significant mRNA-1273 upside at $47 billion over the next 10 years, concentrated primarily in 2021-2023, he said. 

Additionally, consensus expectations for Moderna's vaccine sales are unrealistic, Meacham said. 

"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." 

https://www.benzinga.com/analyst-ratings/analyst-color/21/02/19423561/moderna-analyst-unrealistic-covid-19-vaccine-expectations-create-unfavorable-setup