Shares of Moderna, Inc. MRNA were up 14.7% on Jul 13 following bullish commentary from investment banking company, Jefferies. It has set a target of $90 for Moderna’s share price for the next 6-12 months. Moreover, the company is set to be part of three indices, including popular technology-focused index, NASDAQ-100, beginning next week.
In fact, shares of Moderna have skyrocketed 266.9% so far this year compared with the industry’s increase of 6.6%, primarily on the back of its progress with coronavirus vaccine development.
An analyst at Jefferies seems to be optimistic about Moderna’s future related to development and commercialization of its mRNA-based coronavirus vaccine candidate, mRNA-1273. The analyst believes that the vaccine candidate will be successful and may get at least emergency approval in early 2021. Following the approval, the analyst believes that there will be multi-billion dollars of purchase orders for the vaccine from across the globe. It is estimated that the vaccine will generate more than $5 billion in sales for Moderna over the next few years, thus boosting its share price.
However, the analyst cautioned that this view is not market consensus and investors stand divided on the company’s valuation. This is evident from the fact that the stock has not moved much since mid-May. Failure to get approval for the coronavirus vaccine will have an adverse impact on Moderna’s shares.
However, the analyst is confident about the rest of the pipeline, which includes various mRNA-based vaccines targeting multiple indications including cancer.
Apart from the Jefferies positive outlook for the company, the company’s shares were also boosted by the fact that it will be included in three NASDAQ-based indices — NASDAQ-100 Index, NASDAQ-100 Equal Weighted Index and NASDAQ-100 Ex-Tech Sector Index — prior to market open on Jul 20, 2020.
Although addition to indices does not boost fundamentals of a company, it may lead to higher demand for a company’s stock as fund managers re-shuffle their portfolio, which were created based on these indices. Similarly, Moderna’s shares may see increased transaction as fund managers will buy them. Please note that Moderna will replace CoStar Group, Inc. CSGP in these indices.
Meanwhile, we note that the presence of several large pharma players in the coronavirus vaccine field is likely to increase competition. Pfizer PFE in collaboration with a Germany-based biotech, BioNTech SE BNTX, is developing four mRNA-based vaccines for COVID-19. Moreover, the FDA recently granted Fast Track designation to its two most advanced vaccine candidates. Other big pharma companies developing vaccines for COVID-19 include J&J, AstraZeneca, Merck and Sanofi in collaboration with Glaxo.
Moderna, Inc. Price
Moderna, Inc. price | Moderna, Inc. Quote
Moderna currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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