Moderna Analyst Positive On Coronavirus Vaccine Progress, Downgrades Shares On Valuation

Moderna Inc MRNA has been one of the best performing stocks of 2020 thanks to its COVID-19 vaccine development program.

A Needham analyst stepped to the sidelines Wednesday due to the heady valuation.

The Moderna Analyst: Alan Carr downgraded Moderna shares from Buy to Hold and removed a $110 price target. 

The Moderna Thesis: Moderna's stock price appreciation reflected the significant progress the biopharma has made in 2020 toward validation of its mRNA platform, particularly through the discovery and development of its COVID-19 vaccine mRNA-1273, Carr said in the downgrade note. 

A favorable vote is likely in the Adcom meeting scheduled for Dec. 17, and emergency use authorization could come soon after, the analyst said.

Needham also expects approvals in all other regions where the vaccine candidate is under review. 

Moderna is likely to produce and sell 500 million doses of mRNA-1273 in 2021, Carr said.

An emergency use authorization issuance could prop up the stock, although the nod is unlikely to justify a meaningfully higher price target, the analyst said. 

Further upside is likely if Moderna is able to source raw material for production of 1 billion total doses in 2021 and competitors — including AstraZeneca plc AZN, Johnson & Johnson JNJ, Novavax, Inc. NVAX and Sanofi SA SNY — generate disappointing effectiveness data, according to Needham. 

MRNA Price Action: At last check, Moderna shares were slipping 7.29% to $157.53, having gained 770% year-to-date.

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