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Shares of Moderna Inc. have soared so much that the valuation of the biotech company is “unjustifiable on a fundamental basis,” analyst Geoff Meacham said on Tuesday, as his analysis suggests the stock price should be lower than d ‘about 75% at current levels.
On Monday, the stock jumped 17.1%, the biggest one-day gain in nearly nine months, to a record close of $ 484.47, after the company’s COVID-19 vaccine was provisionally cleared. in Australia. At that price, the stock had climbed 364% year-to-date and valued the company at $ 195.56 billion.
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“Rating: from unreasonable to ridiculous”.
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In that assessment, Meacham, an analyst at Bank of America, noted that the 11-year-old company was worth more than Amgen Inc., 40, AMGN,
which is currently around $ 128.9 billion, and Merck & Co. Inc. MRK, 130,
at around $ 189.7 billion, both of the Dow Jones Industrial Average DJIA,
Components.
Meacham reiterated its underperformance on the stock and kept its price target at $ 115, or 75.6% below current levels.
He said that while Moderna’s COVID-19 vaccine was a major contributor to the global recovery, to justify a $ 200 billion value, two things would have to be assumed:
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Moderna is reportedly providing 1 billion to 1.5 billion doses of its COVID-19 vaccine each year until 2038.
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100% probability of success for the entire pipeline of the company, which includes four programs in phase 2 trials, 10 programs in phase 1 and eight preclinical programs not yet tested in humans, for a total sales peak of $ 30 billion. By comparison, Moderna has reported total revenue of around $ 7 billion in the past four quarters.
“These assumptions are, in our opinion, impossible to justify,” Meacham wrote.
The stock fell 2.9% on Tuesday afternoon, bringing Moderna’s market cap down to $ 189.9 billion, which would put it just above Merck’s current market cap.
The analyst admitted he was bullish on the mRNA technology that Moderna’s vaccine is based on, it was just the way the market valued the company that made it bearish on the stock.
“While we recognize that momentum may continue, we reiterate our underperformance rating, particularly given the broad C-19 expert commentary that runs counter to overly bullish market sentiment,” wrote Meacham.
Moderna’s stock has climbed 553.3% in the past 12 months. In comparison, the shares of Pfizer Inc. PFE,
rebounded 32.0% and BioNTech SE BNTX,
have climbed 472.7% over the past year, while the S&P 500 SPX Index,
grew by 32.1%. Pfizer and BioNTech have teamed up on a COVID-19 vaccine that has been granted emergency use authorization in the United States
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