Shares in Moderna have soared over the past year as its Covid-19 vaccine was rolled out.
Munir Uz Zaman/AFP/Getty Images
Moderna was under pressure Friday after Deutsche Bank called the Covid-19 vaccine maker a “concept stock,” giving shares in the biotech a Sell rating and price target 34% below the stock’s previous closing price.
Deutsche Bank’s Emmanuel Papadakis initiated coverage of Moderna (ticker: MRNA) with a Sell rating on the shares and a target price of $225.
Moderna closed at $339.57 on Thursday. The shares were slipping 2% lower in premarket trading Friday.
“Moderna is a concept company that has ridden a wave of disruptive innovation, pandemic serendipity and management vision (plus a little public funding) to become a concept stock,” Papadakis said.
Shares in Moderna have soared around 380% over the last year as the group became one of a few companies to successfully develop a Covid-19 vaccine, which has been widely rolled out across the U.S. and other developed countries.
Moderna’s Covid-19 vaccine relies on cutting-edge messenger RNA (mRNA) drug technology, which has shown potential in treatment for other viruses, like seasonal influenza.
“Whilst execution has not been lacking, the strategic discipline to stay focused on mRNA is a virtue and we concur there is potential to disrupt dynamics in the broader viral infectious disease arena (e.g. flu),” Papadakis noted. “All that looks more than generously reflected in a valuation that looks detached from a problematic assessment of reality.”
The analyst noted that Moderna’s net cash is expected to hit $20 billion in 2021 and more than $30 billion in 2022.
The company has to sustain its Covid-19 vaccine revenue—in the billions of dollars—or replace it with another revenue stream in order to justify the current valuation of the stock or provide meaningful upside, Papadakis said.
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