Shares of Moderna (MRNA) surged as much as 19% to $74.45 on Monday on news that it will be added to the Nasdaq 100 and a bullish analyst upgrade.
Monday morning, the Nasdaq announced that Moderna will be added to its Nasdaq 100 index prior to market open July 20. Moderna will replace CoStar Group in the index, according to a press release.
In addition, Jefferies initiated coverage of the pharmaceutical company Monday with a “buy” rating and a $90 price target, representing 45% upside from where the stock closed Friday. Shares of Moderna surged as much as 18% Monday.
We think there is a good probability Moderna’s vaccine will work and get at least emergency use authorization in 2021,” Yee wrote. “We think a viable vaccine can generate billions in sales, which we see as reasonable given there would be high demand over the first 1-2 years.
In the first full year of sales of its potential vaccine, Jefferies’ model shows it could bring in $2 billion worldwide if roughly 50 million people get the vaccine at $50. This could grow to a peak of $5 billion between 2025 and 2026, according to the note.
There is also further upside, according to Yee, if significantly more people get the vaccine and the price is pushed higher. “This can quickly get to big numbers of $10-20B+ in theory,” said Yee.
Based on discussions with opinion leaders and public disclosures by the company, the analysts see a “good probability Moderna’s vaccine will work and get at least emergency use authorization in 2021,” Jefferies’ Michael Yee wrote in the note to clients. A safe and effective vaccine “can generate billions in sales, which we see as reasonable given there would be high demand over the first 1-2 years.”
The analysts predict 50 million people will be vaccinated in 2021 at $50 per dose. Under that scenario, Moderna could earn about $2 billion in 2021 and $5 billion over the next few years.
But if 100 million or 200 million people get vaccines at a higher price point, “this can quickly get to big numbers of $10-20B+ in theory,” Yee wrote. Aside from revenues in COVID-19, success would unlock “platform value” as the company is advancing other drugs and vaccines against various diseases.
Of course, there is a chance the vaccine doesn’t work, Yee acknowledged. In that case, the stock would be “hit hard,” along with others, as the pandemic drags on.
Moderna, which is advancing an mRNA vaccine candidate, entered human testing for its vaccine in record time this spring and is kicking off a phase 3 trial this month.
But some of the world’s largest pharma companies are also pursuing COVID-19 vaccines. On Monday, partners Pfizer and BioNTech won FDA Fast Track Designations for two of their candidates. Last week, the CEOs for those companies said in separate interviews they expect to be ready to submit them to the FDA in the fall and winter, respectively. Experts have said it’ll likely take multiple vaccines to defeat COVID-19.
Is Moderna (MRNA) a reliable investment?
Shares of Moderna (MRNA) appear to be a very good investment option, the Money Midnight Indicator is expecting its price to increase considerably in the next several months. The majority of the metrics point to this investment being highly attractive.
