Moderna's stock experienced a significant boost after Oppenheimer upgraded its rating and predicted future success with product launches. This reflects growing confidence in the company's pipeline and potential.
Moderna Inc.'s stock experienced a significant boost on Tuesday, with a 10% surge that positioned it as a leader among S&P 500 index gainers. This positive movement came after Oppenheimer upgraded Moderna's stock to a "buy" equivalent, indicating its confidence in the biotech company's future.
The upgrade, by analysts led by Hartaj Singh, changed Moderna's stock rating from "perform" to "outperform." Singh's team also predicted that this year will see a more impressive performance from Moderna compared to its somewhat lackluster showing in 2023.
Moderna currently has one approved product in its portfolio: an mRNA-based COVID-19 vaccine that has already achieved peak sales. However, the company boasts a pipeline filled with several promising products, including vaccines for flu and respiratory syncytial virus (RSV). Oppenheimer anticipates that these vaccine candidates will secure regulatory approval in the medium term.
In a note to clients, the analysts stated, "We see top-line sales starting to grow in 2025E, with multiple product launches in the next 12-18 months (RSV, Influenza). We also expect significant clinical and regulatory developments (INT, CMV) during this time frame, which further bolsters our optimism for the company."
One notable area of development for Moderna is its work on a cancer vaccine that initially targets melanoma patients. Additionally, positive trial data from the combination of Moderna's melanoma treatment and Merck's Keytruda has also given a boost to Moderna's stock.
In summary, Moderna's stock surge and upgraded expectations reflect growing confidence in the company's pipeline of products and its potential for future success.
In August, Oppenheimer expressed concerns about Moderna's pipeline progress, downgrading the company. However, the analysts now state that Moderna has successfully addressed those concerns. Despite a 40% decline in stock value over the past year due to COVID vaccine sales compression, the analyst team predicts that sales will reach a low in 2024 before rebounding in 2025. This rebound is expected to be driven by increased education and spending on awareness of the need for booster shots.
According to the analysts, Moderna's operating expenses are projected to decline significantly in both 2024 and 2025, followed by an increase thereafter. They estimate that the company will continue to operate at a loss until 2026, which is in line with the Bloomberg consensus suggesting losses stretching into 2027.
The note highlights that Moderna has indicated its willingness to adjust operating expenses if sales progression flattens or stalls.
To reflect their positive outlook, the analysts have assigned a $142 price target for Moderna's stock over the next 12 to 18 months. This represents a potential upside of more than 30% from its current price.
Moderna's gains have also influenced the stock prices of other vaccine and drug makers. Bristol-Myers Squibb Co. saw a 4% increase, Pfizer Inc. rose by 3.9%, and Merck & Co. experienced a 2.9% uptick.
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