On Friday, Brookline Capital Markets adjusted its outlook on Moderna (NASDAQ:MRNA), reducing the price target to $238.00 from the previous $310.00, while maintaining a Buy rating on the stock. The revision follows Moderna's Research and Development Day, where the company provided updates on its product pipeline, including its commercial COVID-19 line and oncology franchise.
The firm highlighted Moderna's ongoing phase III trials for its mRNA-4157 melanoma treatment and the anticipated phase III trial for a non-small cell lung cancer (NSCLC) treatment. The analyst noted these developments align with previously published expectations. Additionally, the completion of enrollment for the mRNA1647 cytomegalovirus (CMV) vaccine's pivotal study was ahead of schedule.
A significant announcement from the event was the release of positive phase III results for the mRNA-1010 flu vaccine program. However, adjustments were made to the company's forecasts due to discontinued programs and changes in the prioritization and timing of projects. As a result, revenue estimates for the years 2025 through 2030 have been reduced by 41.4% to 47.0%, respectively.
Projected operating expenses for the same period are also expected to decrease by 9.6% to 44.0% annually, reflecting the streamlined programs and operational efficiencies. These adjustments have shifted the anticipated year of profitability to 2028, two years later than the previous estimate of 2026. Loss per share is now expected for the years 2025 through 2027, with a reduction in estimated earnings per share (EPS) for 2028 through 2030 by 88.4%, 55.8%, and 46.4%, respectively.
The revised price target of $238 is based on these new projections and the outcomes of the prioritization and timing changes announced during Moderna's R&D Day. Despite the lowered revenue and profitability forecasts, the firm continues to support the stock with a Buy rating, looking at a 12-to-18-month investment horizon.
InvestingPro Insights
As Moderna (NASDAQ:MRNA) navigates its pipeline updates and prioritization changes, real-time data and analytics from InvestingPro offer valuable context for investors. Moderna's market cap stands at $26.78 billion, reflecting its position in the biotech industry. With a negative P/E ratio of -4.56 and an adjusted P/E ratio for the last twelve months as of Q2 2024 at -4.63, the company's profitability challenges are quantified. Furthermore, the company's revenue has seen a significant decline of -52.6% over the last twelve months as of Q2 2024.
Two InvestingPro Tips highlight critical aspects of Moderna's financial health. Firstly, the company holds more cash than debt on its balance sheet, which can be a buffer against operational uncertainties. Secondly, the RSI suggests the stock is in oversold territory, indicating potential for a price correction. These insights could be particularly relevant for investors considering the stock's recent performance and the analyst's outlook on the company's profitability timeline.
For those seeking a deeper analysis, InvestingPro provides a comprehensive list of additional tips, including analysts' revised earnings expectations and anticipated sales decline. The platform offers insights into the company's gross profit margins and stock price volatility, among other metrics. With 11 more tips available on InvestingPro, investors have access to a wealth of information to guide their decisions.
Finally, the InvestingPro Fair Value estimate of $86.87 USD provides a benchmark for investors to compare against the current market price and analyst targets, offering another layer of financial evaluation.
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