Moderna stock expands rally after price target rises 77% at Morgan Stanley

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Moderna Inc. shares rallied to a fifth straight gain on Tuesday, after Morgan Stanley analyst Matthew Harrison added nearly $ 150 to his price target on a heightened outlook for COVID-vaccine sales. 19 from the biotechnology company.

Meanwhile, it has downgraded several other biopharmaceutical stocks, including those from COVID-19 vaccine producer Johnson & Johnson JNJ,
-1.59%,
citing valuation issues, from Merck & Co. Inc. MRK,
-1.63%
given the lack of potential upside catalysts and Amgen Inc. AMGN,
-2.22%
on the evaluation. These three stocks are Dow Jones Industrial Average DJIA,
-0.76%
Components.

Moderna’s original mRNA,
+ 4.73%
climbed 4.8% in afternoon trading. It is now up 17.8% in the past five days, but remains 9.9% below its all-time high of $ 484.47 on August 9. The action is heading for its longest winning streak since the five-day winning streak ended on May 28.

Harrison raised his price target for Moderna’s stock by around 77%, from $ 190 to $ 337.

It also raised the estimate of COVID-19 sales for 2021 to $ 20.25 billion from $ 19.13 billion and its outlook for 2022 sales to $ 30.38 billion from $ 13.50 billion. dollars. The new estimates take into account increased vaccine uptake, including a third booster as part of the primary series.

“We continue to see COVID-19 revenue decline over time, but we don’t see it starting until 2023/2024 compared to our previous estimate of 2022,” Harrison wrote in a note to customers. “We have also added the potential of a combined COVID / respiratory vaccine. “

He reiterated his equal weight rating on the stock, as his price target is about 23% below current levels. “While we believe there is long-term potential for Moderna, we believe that the significant increase in valuation associated with the success of the COVID-19 vaccine limits the short-term potential,” Harrison wrote.

The stock has climbed 597.5% in the past 12 months, while shares of J&J have gained 15.8% and Pfizer Inc. PFE,
-0.15%,
which also has a COVID-19 vaccine with its partner BioNTech SE BNTX,
+ 3.68%,
grew by 35.4%. At the same time, the XPH exchange-traded fund of SPDR S&P Pharmaceuticals,
-0.72%
changed to 12.4% and the S&P 500 SPX index,
-0.34%
increased by 32.1%.

FactSet, MarketWatch


Separately, Harrison downgraded J&J on a par with the overweight position, while maintaining his target stock price at $ 187.

“Management is delivering strong financial results, but stocks have risen in recent months and we see limited news flow over the medium term to push stocks higher,” Harrison wrote.

The stock, which lost 1.7% in Friday afternoon trading, has gained 4.4% in the past three months and hit a closing high of $ 179.47 on August 17. In comparison, the pharmaceutical ETF has fallen 5.5% in the past. three months.

Harrison said the next key event for investors to watch is Pharma Day on November 18, when J&J is expected to share product details in the pipeline and highlight drug candidates with significant market potential.

Merck was also downgraded on a par for the overweight and its price target was lowered to $ 85 from $ 90. He said that while management will likely continue to scale up its Keytruda cancer treatment, he doesn’t think investors will pay for this benefit given concerns about the lack of diversification through loss of exclusivity (LOE).

“Investors are not convinced that the pipeline’s current assets, including the anti-HIV drug islatravir and early oncology assets, are enough to make up for Keytruda’s cliff at the end of the decade, given that crucial data is lacking. will only be read in 2024-2025, “Harrison wrote.

The title fell 1.8% in afternoon trading.

Amgen shares lost 2.6%, putting them on track for the lowest close since late November.

Harrison also lowered his on-par for being overweight, while lowering his price target to $ 251 from $ 280.

“Our new thesis is based on a more balanced risk / reward ratio as investors focus on mid-decade LOEs for Evenity, XGENA and Prolia, offset by continued pipeline progression,” Harrison wrote.

Among other rating changes, Harrison also downgraded the rating from ARGX SE to ARGX,
-2.88%

ARGX,
-2.19%
at equal weight of overweight, and Genmab A / S GMAB,
-3.43%

GMAB,
-4.39%
and Vertex Pharmaceuticals Inc. VRTX,
-2.95%
to be underweight for equal weight.

Argenx shares fell 2.9% in afternoon trading, Genmab dropped 3.7% and Vertex fell 2.9%.


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