Buy Moderna as COVID-19 Vaccine Shows Promising Result; Target Price $112 in a Best-Case Scenario

Vivek Kumar

Moderna Inc announced that its experimental COVID-19 vaccine was safe and induced strong immune responses in all 45 healthy adult participants, sending its shares up over 15% in after-hours trading on Tuesday.

Moderna stock

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Moderna Inc, an American biotech company focused on drug discovery, announced that its experimental COVID-19 vaccine was safe and induced strong immune responses in all 45 healthy adult participants, sending its shares up over 15% in after-hours trading on Tuesday.

Participants who received two doses of vaccination had a much higher level of antibodies, exceeding the average seen in volunteers who recovered from the deadly virus. The biotechnology company said no-one experienced a serious side effect, but 54% of participants reported fatigue, chills, headache and myalgia.

So far, the coronavirus has infected over 13 million people and killed more than 571 thousand worldwide. Moderna started its phase-II trial in May and anticipates phase-III to start by the end of the month.

Executives’ comments

“These Phase 1 data demonstrate that vaccination with mRNA-1273 elicits a robust immune response across all dose levels and support the choice of 100 µg in a prime and boost regimen as the optimal dose for the Phase 3 study,” Tal Zaks, M.D., Ph.D., Chief Medical Officer of Moderna said in a press release.

“We look forward to beginning our Phase 3 study of mRNA-1273 this month to demonstrate our vaccine’s ability to significantly reduce the risk of COVID-19 disease.”

“These positive Phase 1 data are encouraging and represent an important step forward in the clinical development of mRNA-1273, our vaccine candidate against COVID-19, and we thank the NIH for their ongoing collaboration. The Moderna team continues to focus on starting our Phase 3 study this month and, if successful, filing a BLA,” Stéphane Bancel, Chief Executive Officer of Moderna said in a press release.

“We are committed to advancing the clinical development of mRNA-1273 as quickly and safely as possible while investing to scale up manufacturing so that we can help address this global health emergency.”

Moderna stock forecast

Thirteen analysts forecast the average price in 12 months at $86.46 with a high forecast of $112.00 and a low forecast of $60.00. The average price target represents a 15.22% increase from the last price of $75.04. From those 16, 14 analysts rated ‘Buy’, two rated ‘Hold’ and none rated ‘Sell’, according to Tipranks.

Morgan Stanley target price is $90 with a high of $279 under a bull scenario and $7 under the worst-case scenario. Jefferies rated Moderna as ‘Buy’ with a target price of $90. We second Morgan Stanley and Jefferies on Moderna stock outlook. We also think it is good to buy at the current level as 50-day Moving Average and 100-200-day MACD Oscillator signals a strong buying opportunity.

Analyst view

“We are Overweight Moderna. The company has taken an industrialized approach to develop mRNA based therapeutics and has rapidly generated a broad pipeline of 21 programs, 11 of which have entered clinical development. We believe Moderna’s mRNA drug development platform is more diversified and scalable compared with competitors and is validated through broad partnerships with Merck and AstraZeneca,” said Matthew Harrison, equity analyst at Morgan Stanley.

“The COVID-19 vaccine programs provide a significant acceleration of the path to commercialization and validation of the Moderna platform. We are positive on the early data and look forward to the progress. We see vaccines and rare diseases as the key valuation drivers of the company,” he added.

Upside and Downside Risks

Supporting clinical data across several modalities. Meeting timelines and continuing to expand a diversified pipeline. Launch vaccines in multiple indications including CMV and COVID-19, Morgan Stanley highlighted as upside risks to Moderna.

Efficacy and/or safety concerns cause investors to write-off subsequent readouts across additional modalities. Delays in Moderna’s ability to generate significant clinical data. Stronger than expected competitor data, Morgan Stanley highlighted as downside risks.

About the Author

Vivek completed his education from the University of Mumbai in Economics and possesses stronghold in writing on stocks, commodities, foreign exchange, and bonds.

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