On Thursday, Moderna Inc. (NASDAQ: MRNA) reported third-quarter revenue of $1.83 billion, beating the consensus of $1.25 billion.
The company attributed the growth to higher sales in the U.S. market following the earlier launch of the updated COVID-19 vaccine.
BofA Securities notes that Moderna's stock rose early Thursday but ended the day lower, likely due to slowing vaccine trends and uncertainty around the company's respiratory vaccine lineup, as well as new concerns related to Trump and Kennedy's positions on vaccines.
The analyst has reduced the price target from $110 to $90, adjusting for a higher discount rate (9% instead of 7%) based on updated commercial risk expectations, lower sales forecasts for COVID-19 and RSV vaccines, and reduced net cash. The analyst maintained a Neutral rating on Moderna.
Leerink Partners notes the earnings update didn't improve the negative outlook for COVID and RSV, and the revenue beat, driven by excess inventory, pointed to weak earnings quality.
The company faces challenges from declining COVID demand and losing market share to Pfizer Inc. (NYSE: PFE), which could affect Moderna's ability to clear excess inventory and raise concerns about potential write-downs in the fourth quarter of 2024.
Leerink has lowered the price target from $46 to $38, with an Underperform rating.
Oppenheimer remains optimistic about the long-term potential of Moderna's RSV vaccine, mRESVIA growth. "We think MRNA is well-positioned to extend the mRESVIA label into high-risk adults 18-59, filing an sBLA with PRV by YE24," the analyst writes, and maintains the Perform rating.
The analyst notes mRESVIA launch will take longer than expected but still considers it an undervalued asset, particularly with its upcoming label extension.
The analyst also adds, "We are impressed by MRNA's progress toward opex optimization and believe such efficiency could invite a larger upside for its upcoming pipeline launches."
The company expects the cost of sales to be 40-45% of product sales for the year (previously 40-50%), with R&D expenses anticipated to be $4.6 billion-$4.7 billion (previously $4.8 billion).
Price Action: MRNA stock is down 6.33% at $47.10 at last check Friday.