No Buyers Ahead of Moderna Report

Moderna Inc. (MRNA) reports Q4 2021 results in Thursday’s pre-market, with analysts looking for a profit of $9.81 per-share on $6.73 billion in revenue. If met, earnings-per-share (EPS) will compare favorably with the $0.60 loss booked during the same quarter in 2020.  The stock fell 17.9% in November after missing Q3 estimates by wide margins and lowering 2021 guidance. It has relinquished another 38% through February and has now fallen more than 70% since posting an all-time high just six months ago.

Spikevax adaptation has slowed dramatically in first world countries while Moderna has been forced to reduce profit margins before shipping to Africa and South America. The company has other drugs in the pipeline but none will overtake the historic success of the COVID compound, raising questions about long-term valuation. Worse yet, new variants are unlikely to have a dramatic effect on vaccination rates, with millions now choosing natural immunity, committed to returning to a normal life regardless of the costs.

Deutsche Bank analyst Emmanuel Papadakis upgraded Moderna to ‘Hold’ in January, noting “key for the recovery of sentiment will be a clearer path to additional durable long-term revenue streams of significance. With RSV/CMV P3 likely 2023 read outs and EBV still early, the question is then what may drive that re-appraisal in 2022. We can see several datapoints of note, though at this stage we are not clear whether these are likely to be sufficient ahead of those key 2023 datapoints”.

Wall Street consensus has improved to an ‘Overweight’ rating in the last three months, based upon 7 ‘Buy’, 2 ‘Overweight’, 11 ‘Hold’, 0 ‘Underweight’, and 1 ‘Sell’ recommendations. Price targets currently range from a low of $85 to a Street high $506 while the stock is set to open Wednesday’s session halfway between the low and $221 median target. This placement suggests that Moderna is rapidly approaching ‘fair value’ after two years of intense volatility.

Moderna broke out to a new high in the first quarter of 2020, entering an historic uptrend that unfolded through three rally waves before topping out near 500 in August 2021. It’s now sold off in three waves, piercing support at the .618 Fibonacci rally retracement at 200 in January. The stock is deeply oversold on a weekly and monthly basis but it will still take a 50+ point bounce to generate longer-term buy signals.

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Disclosure: the author held no positions in aforementioned securities at the time of publication.