On Friday, Piper Sandler adjusted its outlook on Moderna (NASDAQ:MRNA) shares, reducing the price target to $157 from the previous $214. The firm maintains an Overweight rating on the biotechnology company's stock. The revision follows Moderna's announcement of a decrease in its product sales guidance for the year, now forecasting revenues between $3 billion and $3.5 billion, a drop from the earlier estimate of $4 billion.
The lowered guidance is attributed to several factors including a "very low" SpikeVax contract in Europe, potential deferrals of SpikeVax orders, and increased competition in the RSV vaccine market.
Despite the revised sales expectations, Moderna continues to make progress with its vaccine pipeline. The company has reported positive Phase III data and plans to seek licensure for its seasonal flu vaccine mRNA-1010 and its next-generation COVID vaccine mRNA-1283.
Furthermore, Moderna is in discussions with regulators regarding a combination flu and COVID vaccine, mRNA-1083. Additionally, there is anticipation for interim Phase III results from the CMVictory trial for its cytomegalovirus vaccine mRNA-1647 within this year.
Moderna's collaboration with Merck on the development of mRNA-4157, a treatment combined with KEYTRUDA for a broad range of cancers, is also advancing. The companies are gearing up to begin the Phase III INTerpath-001 trial targeting high-risk melanoma.
Financially, Moderna concluded the second quarter of 2024 with a substantial cash reserve of $10.8 billion and projects to have approximately $9 billion by the end of the year. The biotech firm is also preparing to host its annual Research and Development Day on September 12, which will take place in New York City, offering an opportunity for further insights into its pipeline and strategy.
Piper Sandler reaffirms its confidence in Moderna with the Overweight rating, despite the price target adjustment. The decision reflects the firm's assessment of the company's potential amidst the updated sales guidance and ongoing developments in its vaccine portfolio.
In other recent news, Moderna reported a net loss and a decrease in COVID-19 vaccine sales outside the U.S. in its second-quarter 2024 earnings call. Despite this, the company announced the U.S. launch of its RSV vaccine, mRESVIA, and reported positive Phase III results for its flu and COVID-19 combo vaccine. Moderna revised its 2024 net product sales outlook to between $3.0 billion and $3.5 billion, attributing this adjustment to various market pressures and potential revenue deferrals.
Moderna's earnings call also highlighted its AI-driven HR initiatives and plans for managing expenses in preparation for the upcoming COVID season. The company's collaboration with Merck on the development of mRNA-4157, a treatment combined with KEYTRUDA for a broad range of cancers, is progressing, with the initiation of the Phase III INTerpath-001 trial targeting high-risk melanoma.
These developments come after Piper Sandler adjusted its outlook on Moderna shares, reducing the price target to $157 from the previous $214, while maintaining an Overweight rating on the biotechnology company's stock.
The revision followed Moderna's announcement of a decrease in its product sales guidance for the year, now forecasting revenues between $3 billion and $3.5 billion, a drop from the earlier estimate of $4 billion. The lowered guidance is attributed to several factors including a "very low" SpikeVax contract in Europe, potential deferrals of SpikeVax orders, and increased competition in the RSV vaccine market.
InvestingPro Insights
As Moderna navigates a challenging market, real-time data from InvestingPro provides a more detailed picture of the company's financial health. The adjusted market capitalization of Moderna stands at $36.09 billion, reflecting the market's valuation of the company following recent events.
With a negative P/E ratio of -7.76, Moderna's earnings do not currently justify its stock price, though this metric is improved when looking at the last twelve months as of Q1 2024, with an adjusted P/E ratio of -6.09. This suggests that investors may be looking at the company's future potential rather than its past performance.
InvestingPro Tips highlight that management's aggressive share buybacks could be a sign of confidence in the company's value. Additionally, Moderna's balance sheet holds more cash than debt, providing financial stability and flexibility. While analysts anticipate a sales decline in the current year, Moderna's liquid assets exceed short-term obligations, indicating an ability to meet immediate financial commitments. For investors seeking more in-depth analysis, there are 13 additional InvestingPro Tips available for Moderna at https://www.investing.com/pro/MRNA, which could provide further insights into the company's investment potential.
Understanding these financial metrics and strategic moves is crucial for investors considering Moderna's stock. The company's solid cash position and management's actions may offer some reassurance, despite the challenges reflected in the recent price target adjustment by Piper Sandler and the anticipated sales decline.
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