Moderna’s COVID-19 Vaccine’s Pricing Disappoints Investors, But This Analyst Remains With the Bulls
mRNA vaccine maker Moderna (MRNA) has undoubtably been one of 2020’s success stories. One of the frontrunners in the race to develop a COVID-19 vaccine, investors have cheered each step of its candidate’s progress. While shares haven’t soared as majestically as those by some of its smaller sized peers, they have nevertheless appreciated by 243% so far this year.
Yet, the company sparked confusion among investors last week after announcing that the US government has put an order in for 100 million doses of the company's COVID-19 vaccine candidate mRNA-1273, for a total cost of $1.53 billion. As it turns out, the figure amounts to a price between $12 to $13 per course. This is far below the $32 to $37 range per dose the company quoted during its recent 2Q20 earnings.
While Oppenheimer analyst Hartaj Singh admits investors were disappointed by the low pricing, the 5-star analyst believes the contract amounts to “the beginning salvo of a competitive process.” Singh argues that in addition to being on the front foot with its vaccine’s development (a Phase 3 trial for mRNA-1273 kicked off earlier this month), Moderna has another advantage over its peers.
“We would point out that MRNA is still the only company with a manufacturing set-up and scale-up that can deliver 10's to 100's of millions of doses per month of mRNA-1273,” Singh said. “At extremely competitive pricing, this would still equate to a substantial business, one that likely exceeds our expectations (~$1B in 2021 sales). We await greater visibility before updating our model.”
To this end, Singh rates MRNA an Outperform (i.e. Buy) alongside a $108 price target, which implies a strong 61% upside. (To watch Singh’s track record, click here)
Overall, Moderna gets plenty of support from Wall Street analysts. MRNA's Strong Buy consensus rating is based on 12 Buys vs. 3 Holds. At $93.50, the 12-month upside potential clocks in at 34%. (See Moderna stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
