Moderna, Inc. (MRNA) – Moderna analyst wonders if COVID-19 opportunity can support assessment

Moderna Inc. (NASDAQ: MRNA) The coronavirus vaccination program is running smoothly, with emergency use clearance likely as early as late December.

Moderna analyst: BofA Securities analyst Geoff Meacham reiterated a neutral rating on Moderna shares and raised the price target from $ 105 to $ 150.

The Moderna thesis: While Moderna’s pipeline is promising, the long-term sustainability of COVID-19 revenue is still in question, Meacham said in a note Thursday.

BofA has also tempered any broad reading of the COVID-19 outlook to the rest of the pipeline, the analyst said.

The company’s updated baseline scenario assumes $ 10 per share in cash, $ 62 per share in non-COVID-19 value, and $ 78 per share in COVID-19 vaccine revenue, he said.

Even in a bullish case where mRNA-1273 is widely available globally, with limited competition and manufacturing constraints, the cumulative sales value of over $ 85 billion as attributed by the market is a stretch, said Meacham.

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Any realized value is expected to come from wholesale contracts, where the company will face limited pricing power and negative outlooks due to overcharging, especially as additional vaccines are approved, the analyst said.

Street’s estimates assume that more than 150 million people will be revaccinated with mRNA-1273 each year, which is also questionable, he said.

Scaling up manufacturing could pose challenges, with demand likely to outstrip supply in the next few years, Meacham said.

For valuations to be warranted at the peak of the share price of $ 178, either the COVID-19 vaccine is expected to generate cumulative revenue of over $ 85 billion by 2030, or vaccine approval should significantly disrupt the rest of Moderna’s pipeline, according to BofA. .

The latter possibility is difficult given the lack of hard data, the company said.

MRNA price action: At last check, Moderna shares were up 5.48% to $ 150.84.

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