TD Cowen has revised its price target for Moderna (NASDAQ: NASDAQ:MRNA), reducing it to $60 from the previous $70, while retaining a Hold rating on the stock.
The firm acknowledged the company's efforts to decrease its research and development expenses by $1.1 billion by 2027 and to set a more realistic goal for reaching a breakeven point by 2028.
The adjustment reflects a cautious stance on the biotechnology company's financial guidance and pipeline developments.
The analyst from TD Cowen gave credit to Moderna's management for their strategic cost reductions and for updating their financial guidance to a more attainable timeline.
The recalibration comes as the company aims to balance its budget by 2028, a move seen as a necessary step in its long-term financial planning.
TD Cowen also deemed Moderna's revenue guidance of $2.5 to $3.5 billion for the year 2025 as sensible under current conditions. This projection is based on existing market dynamics and the company's operational strategies.
However, the update was not without its drawbacks. The analyst expressed disappointment regarding the most recent pipeline update, particularly the decision not to proceed with the INT AA. This development was seen as a setback for Moderna's pipeline of potential products.
Despite the challenges, TD Cowen's commentary suggests a neutral outlook on Moderna's future, with other vaccine and rare disease updates aligning with expectations. The firm's current position reflects a wait-and-see approach as the company continues to navigate the complex biotech landscape.
InvestingPro Insights
Recent data from InvestingPro provides additional context to the financial state and stock performance of Moderna (NASDAQ:MRNA). The company holds a market capitalization of approximately $26.78 billion, underscoring its significant presence in the biotech industry. Despite the challenges highlighted by TD Cowen, Moderna's balance sheet reflects a strategic advantage, as InvestingPro Tips indicate that the company holds more cash than debt, which could provide financial flexibility in the face of R&D adjustments and pipeline developments.
However, the stock's current P/E ratio stands at -4.56, suggesting that investors are cautious about Moderna's profitability prospects. This sentiment is echoed by the fact that analysts have revised their earnings downwards for the upcoming period, and they anticipate a sales decline in the current year. Additionally, the company's gross profit margin is notably negative at -62.99%, indicating substantial room for improvement in its cost structure and operational efficiency.
For investors looking for more detailed analysis and additional insights, there are 13 more InvestingPro Tips available, providing a comprehensive view of Moderna's financial health and market performance. These tips, along with real-time metrics and analyst forecasts, can be found at InvestingPro.
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