Moderna Stock Crash Worsens Even After Morgan Stanley Says Flu Vaccine Results Could Boost Shares

Topline

In a glimmer of hope for one of this year’s worst-performing stocks, Morgan Stanley analyst Matthew Harrison projected incoming results for one of Moderna’s flu vaccine candidates would likely be a promising development for the firm’s struggling stock, joining a growing crop of experts looking to Moderna’s potential suite of offerings—and not necessarily its Covid-19 vaccine—as a catalyst for growth, even as shares continue to plummet.

Moderna stock fell 6% despite the bullish projection, pushing shares down nearly 72% below their … [+] August all-time high.

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Key Facts

In a Tuesday evening note to clients, Harrison said phase 2 trial data for Moderna’s flu vaccine in the coming weeks would “likely demonstrate non-inferiority and even a trend toward superiority” relative to competing products on the market—an improvement from December results that Harrison called “undifferentiated” from biotech firm Sanofi’s flu vaccine.

The bullish reading comes amid a steep drop for Moderna shares, which fell 6% Wednesday to $135.73 and have plummeted 42% this year, becoming the S&P 500’s third-worst-performing stock—behind only Etsy (down 43%) and PayPal (44%).

Harrison stopped short of recommending investors to buy the stock, instead reiterating a neutral rating, but the firm’s new price target of $213 implies shares could skyrocket about 49% over the next year.

Other analysts are more bullish: In a Friday note, Piper Sandler’s Edward Tenthoff reiterated his $348 price target, a staggering 150% above current prices, after Moderna announced three new vaccine candidates under development—one for herpes, one for the virus that causes shingles and one targeting antigens for cancer.

Tenthoff told investors the success of Moderna’s Covid-19 vaccine has lessened the financial risk associated with developing new vaccines using the same technology and touted the firm’s “broad” development strategy—which other analysts have also pointed to as a source of opportunity.

On Tuesday, Moderna initiated phase 3 trials for a vaccine targeting the respiratory syncytial virus, which causes a respiratory illness akin to the flu and Covid; the firm also has an HIV vaccine in the works.

Surprising Fact

Moderna has plunged 72% from an all-time closing high of $484 on August 9, 2021, wiping out more than $140 billion from the firm’s market capitalization, which now stands at less than $56 billion.

Key Background

Founded in 2010, Cambridge, Massachusetts-based Moderna spent nearly a decade developing the technology for its messenger RNA vaccines, which tell the body to produce part of a pathogen to trigger an immune response (unlike traditional vaccines that instead use a piece of the pathogen). Once the pandemic hit, the company doubled down on the effort and in November 2020 filed for an emergency use authorization for its Covid-19 vaccine. The shots have proven to be a massive boon for businesses heading up their development, but Moderna shares have struggled in recent months as critics increasingly question whether or not sales of Covid-19 vaccines alone will prove a viable revenue stream in the years to come.

What To Watch For

Moderna is slated to release its fourth-quarter earnings Thursday morning. Analysts expect the Massachusetts-based firm will likely report its first quarterly profit ever and revenue of $6.8 billion, up 1,090% from one year prior.

Big Number

$5 billion. That’s nearly how much third-quarter revenue Moderna reported in November, falling notably short of average analyst projections calling for $6.2 billion.