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Shares of Covid-19 vaccine maker Moderna were on track for their best single-day performance in more than a year, after an analyst at Oppenheimer issued a rare upgrade of the stock.
Moderna
shares dropped 45% in 2023, making the stock one of the year’s worst performers in the
S&P 500.
Covid-19 vaccine sales tumbled, and the company incurred significant costs as it shrank its manufacturing footprint in response to declining demand. Moderna doesn’t expect to break even again until 2026.
There are early signs, however, that the company’s significant investment in its pipeline of mRNA-based products could bear fruit. In mid December, the company reported promising new data on a cancer treatment it is developing in partnership with
Merck.
In his Tuesday note, Oppenheimer analyst Hartaj Singh wrote that Moderna could have five products by 2026, and that uptake of Covid-19 vaccines has likely bottomed out.
Singh upgraded Moderna to Outperform from Perform with a price target of $142 in a research report.
The shares rose 13% to $112.57, making the stock the leading performer in the
S&P 500
on Tuesday. It was also on track for its largest increase since Dec. 13, 2022, when it gained 20%, according to Dow Jones Market Data. Rival vaccine maker
Pfizer
was up 3.8% to $29.88.
The upgrade comes amid an increase in Covid-19 cases in the U.S., and the emergence of a new variant, called JN.1, that has raised alarms with public health authorities.
In their note, the Oppenheimer analysts shared a few reasons for the upgrade including more visibility on Covid-19 vaccine sales, a framework for operating expenses. They added that factors in 2024 and 2025 lead them “to believe that MRNA could be a five-product commercial company by 2026.” The catalysts for this year and next include progress outside Covid-19 including with the company’s respiratory syncytial virus and influenza vaccines.
This is welcome news to investors who saw Moderna stock lose 45% of its value over the past 12 months as Covid-19 vaccine sales waned. The Oppenheimer analysts think sales “could hit a low-point in 2024, due to vaccine fatigue and the complexities of the U.S. commercial market” but they expect an uptick in sales in 2025 and beyond as education and awareness around Covid-19 increase.
This mirrors a larger narrative on Wall Street that gains may be on the horizon for the vaccine maker. The average analyst price target for Moderna is $126.72, while shares are currently trading hands at about $100, according to FactSet.
Write to Emily Dattilo at [email protected]
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