Moderna Analyst: COVID-19 Vaccine Value Largely Reflected In Stock

A day ahead of an FDA panel meeting for Moderna Inc's MRNA coronavirus vaccine candidate, an analyst at Morgan Stanley stepped to the sidelines on the stock. 

The Moderna Analyst: Matthew Harrison downgraded Moderna from Outperform to Equal-weight and raised the price target from $100 to $150.

The Moderna Thesis: Moderna is likely to be a more valuable company over a multiyear period, Harrison said in a Wednesday downgrade note.

The vaccine developer is one of the most innovative and is capable of outperforming most biotech companies in the long-term, the analyst said.

The near-term stock movement is likely to be largely dictated by COVID-19 vaccine revenue realization, vaccine competition and long-term COVID-19 revenue sustainability, he said. 

Moderna's vaccine pipeline is estimated at about $100 per share, or two-thirds of its valuation, Harrison said.

The rest of the company's vaccine candidates — including those for cytomegalovirus, respiratory syncytial virus, human metapneumovirus and parainfluenza type 3 — are similar in value to the COVID-19 opportunity, the analyst said. 

Related Link: The Week Ahead In Biotech: 2 IPOs Plus FDA Decisions On Moderna's COVID Vaccine And Drugs From Amgen, MacroGenics

While vaccines represent the majority of Moderna's valuation, significant upside exists in both rare diseases and oncology, he said. 

"And with investor expectations closer to the bull case than the bear case on COVID-19, we think its appropriate to step to the sidelines for now and look for entry points to better realize the potential long-term value," Harrison said. 

Morgan Stanley sees COVID-19 revenue as providing the company with a war chest of $10 billion to $20 billion in cash, which the sell-side firm said could come in handy to dramatically accelerate its pipeline and provide the scale needed to realize the broad opportunity of mRNA. 

"This will further distance the company from its mRNA competition and should not be overlooked," Harrison said. 

MRNA Price Action: At last check, Moderna shares were sliding 6.25% to $138.02. 

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