Why Moderna Stock Is Down By 15% Today

Moderna Stock Falls As Merck Reports Positive Results Of Its Antiviral Drug

Shares of Moderna found themselves under strong pressure after Merck announced the resuls of the study for its antiviral drug molnupiravir. The study found that the drug reduced the risk of hospitalization or death for coronavirus patients by 50%.

Not surprisingly, the news have pushed Merck stock to yearly highs. At the same time, shares of vaccine makers suffered from strong sell-off. BioNTech stock is down by 13% while Novavax stock is down by 19% in today’s trading session.

The market is worried that a successful anti-coronavirus drug will hurt demand for vaccines in the future. While demand for vaccines will certainty remain strong in 2022, the market begins to question whether demand will stay healthy in 2023 and beyond.

Before Merck’s announcement, it looked that vaccine makers can count on an annual coronavirus shot, just like in the case of a flu shot. However, if a successful drug emerges, the pressure on people to get these shots may wane over time, which will crash demand for coronavirus vaccines.

What’s Next For Moderna Stock?

Analyst estimates for Moderna’s earnings in 2021 have recently moved lower, and now analysts expect that the company will report earnings of $29.31 per share this year. In 2022, Moderna is expected to report earnings of $27.1 per share, so the stock is trading at roughly 12 forward P/E, which is cheap for the current market environment.

However, it looks that the market is ready to pay attention to the company’s longer-term potential which remains unclear. Moderna may continue to enjoy strong demand for its vaccines, which means that the stock is extremely cheap at current levels, or it may suffer from a rapid deterioration of this demand. The market looks nervous after Merck’s announcement, so traders should be prepared for volatility in the upcoming trading sessions.

For a look at all of today’s economic events, check out our economic calendar.