Despite the reduction in global cases of Covid-19 and the expected gradual return to normal, the fear of mutant strains remains.
Jefferies analyst Michael Yee considers the spectrum of new variants to be one of the main reasons why Moderna (MRNA) is well positioned to capitalize.
“We strongly believe that MRNA is negotiating visibility in 2022+, where ‘2.0’ variant vaccines are the focus because Street fears that variants will hinder recovery, and as long as the variants are there, MRNA can benefit because it can adapt quickly and do 2.0 and 3.0 ”, said the analyst.
Since the emergence of the South African variant, for which Moderna’s covid-19 m-RNA-1273 vaccine proved less effective, biotechnology has begun testing the new variant; Yee expects “positive” data in the summer. The analyst predicts a robust global effort to combat any new strains, and notes that some countries have already started placing orders for variant vaccines.
New variant or not, Yee believes that the demand for Moderna’s vaccine is stronger than initially forecast. When the company reports fourth-quarter earnings this week (February 25), Yee expects the company’s prospects to confirm this.
“In our opinion, MRNA has clearly emerged as an important player, we hope that the 2021 guidance will show this including potential for $ 15-16B + in sales (increased to $ 15B) and much more than investors thought six months ago,” said Yee. “MRNA’s production capacity appears to be increasing well, as deliveries to the U.S. are being delayed by 1-2 months and MRNA is set to meet its US $ 300 million commitment by the end of July. . ”
On the other hand, the analyst says that some “valuation-sensitive investors” may be “frustrated” by Moderna’s $ 63 billion market capitalization. This undoubtedly means that expectations are high and multiples high and massive stock appreciation are cited as Yee’s reasons for maintaining a Hold rating for the stock for now.
That said, Yee raised his target price from $ 150 to $ 180, which suggests a ~ 13% increase from current levels. (To look at Yee’s history, Click here)
The rest of the street slopes cautiously upward. MRNA’s moderate purchase consensus rating is based on 6 purchase ratings, 4 suspensions and 2 sales. There is a possible 8% increase if the target of US $ 172.09 is reached next year. (See MRNA stock analysis at TipRanks)
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Disclaimer: The opinions expressed in this article are exclusively those of the analyst presented. The content should be used for informational purposes only. It is very important to do your own analysis before making any investments.