Moderna (MRNA) shares have been on the backfoot since the turn of the year but investors were evidently pleased with the company’s latest quarterly results, giving the stock a 15% boost in the subsequent session.
The vaccine giant posted beats on both the top-and bottom-line in Q4. Revenue hit 7.21 billion, beating the forecasts by $480 million. EPS of $11.29 came in ahead of the consensus estimate by $1.68.
In further good news, the company raised its outlook for the sales of its Covid-19 vaccine in 2022. Moderna now anticipates sales of at least $19 billion, $2 billion above its prior estimate.
But investors had more to be pleased about. The company also announced a $3 billion share buyback program.
Morgan Stanley’s Matthew Harrison counts this development along with the strong guidance as the reasons behind investors’ positive response.
That said, the analyst sees the Covid opportunity as having mostly played out already and believes the pipeline’s development is key here.
“While we believe there is long-term upside for Moderna, we believe the significant valuation increase associated with the success of the COVID-19 vaccine limits the near-term upside,” the 5-star analyst said. “We continue to see flu, rare diseases and cancer vaccines as the key data events for 2022.”
A Phase 3 study has already been launched for a vaccine targeting respiratory syncytial virus while a Phase 2 study of a flu vaccine is now fully enrolled. A Phase 3 study for a flu vaccine is also expected to kick off this year.
For now, Harrison remains on the sidelines, sticking with an Equalweight (i.e., Hold) rating. But Harrison might as well have said “buy” — because his price target, currently at $213, could deliver 33% profits to new investors. (To watch Harrison’s track record, click here)
It’s a similar story amongst Harrison’s colleagues. The stock boasts a Hold consensus rating based on 9 Holds, 4 Buys and 1 Sell. However, the forecast calls for 12-month returns of 64%, given the average price target clocks in at $248.3. It will be interesting to see whether analysts upgrade their ratings or reduce the price targets shortly. (See Moderna stock forecast 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.
