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Why Moderna and Novavax Are Smart Long-Term Buys


Sep. 4 2020, Updated 6:53 a.m. ET

Moderna stock rose almost 20% on Monday and closed at $80.00 with a market cap of $29.7 billion. The stock rose after the biotechnology company reported positive data for its potential COVID-1 vaccine mRNA-1273. Among all of the 45 participants, the vaccine generated coronavirus antibodies in an early-stage human trial.

Moderna stock has generated returns of 247% in the last 12 months and 71% in the last month. The stock is trading 593% above its 52-week low of $11.54 and 8% below its 52-week high of $87.00.

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Moderna reported revenue of $8.4 million in Q1

Moderna announced its first-quarter earnings results earlier this month. In the first quarter, Moderna reported an EPS of -$0.35 compared to -$0.40 in the first quarter of 2019. The earnings met analysts’ consensus estimate of -$0.35 per share. Moderna generated revenue of $8.4 million—a reduction of 47.7% from the first quarter of 2019. The biotechnology company missed analysts’ consensus revenue expectation of $17.1 million.

Analysts’ recommendations for Moderna stock

Among the 11 analysts covering Moderna stock, ten recommend a “buy,” while one recommends a “hold.” None of the analysts recommend a “sell.” The mean target price of $86.00 implies a 7.5% upside from the closing price of $80.00 on Monday.

On Monday, Oppenheimer analyst Hartaj Singh raised its target price on Moderna stock to $108 from $62 with an “outperform” rating. According to a report from TheFly, “Based on the strong immunogenicity data and tolerable safety profiles mRNA-1273 has demonstrated, Singh increased the probability of success of the vaccine to 50%.”

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According to a report from TheFly, JPMorgan analyst Cory Kasimov said, “The Phase 1 results from Moderna’s COVID-19 vaccine candidate mRNA-1273 appear to be about as promising as one could hope for at this still early stage of development and further increases the probability that Moderna may have a viable product.” The report added, “While there is still work to be done and risks to navigate, the update suggests that mRNA-1273 vaccination induces potentially protective neutralizing antibodies and appears safe and tolerable.” Kasimov has an “overweight” rating on Moderna stock.

Needham increased its target price from $58 to $94 on Moderna stock. Piper Sandler increased its target price to $102 from $57. Meanwhile, Goldman Sachs lifted its target price to $105 from $63.

Stock returns

On Monday, Moderna stock was trading 45.2% above its 20-day moving average of $55.08. Meanwhile, the stock is trading 97.2% above its 50-day moving average of $40.57 and 158.2% above its 100-day moving average of $30.98. The stock’s 14-day relative strength index score of 80.65 indicates that the stock is overbought.

Moderna stock has an upper Bollinger Band level of $73.47. The company’s middle Bollinger Band level is $55.08, while its lower Bollinger Band level is $36.68. On Monday, the stock closed near its upper Bollinger Band level, which indicates that the stock is overbought.

Novavax COVID-19 vaccine

Investors should also take note of Novavax’s (NASDAQ:NVAX) coronavirus vaccine NVX-CoV2373. The company has seen promising results for its potential coronavirus vaccine candidate. Now, Novavax will test the vaccine on humans. The stock rose almost 30.6% on Monday and closed at $56.96. The stock has generated returns of 865% in the last 12 months and 199% in the last month. Novavax is trading 1,509% above its 52-week low of $3.54 and 7% below its 52-week high of $61.50.

At 6:53 AM ET today, Moderna stock fell 5% in pre-market trading, while Novavax stock fell 6%. The S&P 500 futures fell 0.33%, while the Dow futures fell 0.36%.

Read Coronavirus Vaccine: Novavax and Moderna Lead the Race to learn more.


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