Why BofA Is Bearish On Moderna Despite COVID-19 Vaccine Success

Moderna, Inc. MRNA shares have been on an extended run since 2020, and with the gains, the stock is already capturing Moderna's pipeline upside, according to a BofA Securities analyst. 

The Moderna Analyst: Geoff Meacham maintained an Underperform rating on Moderna with a $100 price target.

The Moderna Thesis: The share momentum continues to be almost entirely driven by COVID-19 headlines, and the focus is likely to return to the company's non-COVID-19 pipeline over the next 12-18 months, Meacham said in a Thursday note. 

BofA's sum-of-the-parts net present value analysis, the analyst said, ascribes $56/share to the COVID-19 vaccine program, $25/share for the other pipeline programs and $19/share in net cash, the analyst said.

The next few years will likely be the most profitable for the company for the foreseeable future, Meacham said.

The cytomegalovirus vaccine is the closest asset to commercial launch, with an estimated launch timeline of 2024, the analyst said. 

It is unlikely that Moderna's non-COVID-19 pipeline can recoup the sales decline from the COVID-19 vaccine any time soon, he said. 

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Based on BofA's current COVID-19 estimates, the valuation of about $87 billion-plus assumes a 100% probability of success for Moderna's entire pipeline, Meacham said. This, according to the analyst, is an unlikely outcome.

"And while we do see clear positive read-through from success in COVID-19 to the company's prophylactic vaccines, many of Moderna's pipeline assets are several years from the market with multiple derisking steps left to go."

MRNA Price Action: At last check Thursday, Moderna shares were down 2.91% at $211.12. 

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