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Novavax Rose 33% Due to $1.6 Billion COVID-19 Funding

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Sep. 4 2020, Updated 6:55 a.m. ET

Today at 9:08 AM ET, Novavax stock rose 32.7% to $105.19 in the pre-market session. The stock rose following reports that the company received $1.6 billion for its COVID-19 vaccine candidate.

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According to a CNBC report, “Novavax was awarded $1.6 billion in funding from Operation Warp Speed, the government program aimed at speeding the development and delivery of a Covid-19 vaccine. The money will be used to complete late-stage studies, establish large-scale manufacturing, and deliver 100 million doses as early as late 2020.”

Novavax and other biotech companies, including Johnson & Johnson (NYSE:JNJ), Moderna, AstraZeneca (NYSE:AZN), and Merck & Co. (NYSE:MRK), have been racing to develop COVID-19 vaccines.

Analysts’ recommendations and target price

Among the six analysts following Novavax stock, one recommends a “strong-buy,” three recommend a “buy,” and two recommend a “hold.” None of the analysts recommend a “sell.” Analysts have an average 12-month target price of $86.25 on Novavax. The target price implies a return of 8.6% based on the closing price of $79.44 on Monday. The consensus target price for the stock has increased from $51.80 in June—a growth of 66.5%.

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Growth projections for Novavax

In the first quarter of 2020, Novavax reported an adjusted EPS of -$0.58 compared to -$2.20 in the same quarter last year. The adjusted EPS beat analysts’ consensus expectation of -$0.70. Novavax generated sales of $3.38 million—a reduction of 15.2% from the first quarter of 2019. The biotech company beat analysts’ consensus sales expectation of $1.74 million.

Wall Street analysts expect Novavax to post an adjusted EPS of -$0.35 on total revenue of $26.3 million in the second quarter of 2020. Analysts expect the company’s revenues to rise from $18.66 million in 2019 to $279.43 million in 2020. The sales could rise to $1.24 billion in 2021. Meanwhile, the adjusted net loss will likely decrease from $5.51 per share in 2019 to $0.08 per share in 2020. Analysts also expect an adjusted EPS of $10.05 in 2021. 

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Stock performance

Novavax stock fell 2.7% on Wednesday and ended the day at $79.44 with a market cap of $4.6 billion. Notably, the stock price has risen by 2.65% in the trailing five-day period, while it has risen by 1,449% in the trailing 12-month period. The stock is trading 11.2% below its 52-week high of $89.50 on June 30, 2020. The stock was also trading 2,144% above its 52-week low of $3.54 on November 21, 2019. On a year-to-date basis, the stock has risen by 1,896% as of Monday.

Based on the closing price on Monday, Novavax stock was trading 17.7% above its 20-day moving average of $67.51. The stock is also trading 62.2% above its 50-day moving average of $48.98 and 156.1% above its 100-day moving average of $31.02. With a 14-day relative strength index score of 69, the stock is approaching overbought levels.

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Novavax stock has an upper Bollinger Band level of $94.55, while its lower Bollinger Band level is $34.46. On Monday, the stock closed near its middle Bollinger Band level of $64.51, which indicates that the stock isn’t oversold or overbought.

At 9:50 AM ET today, Johnson & Johnson, Moderna, AstraZeneca, and Merck & Co. shares have returned -0.07%, -0.90%, -0.45%, and -0.52%, respectively. However, the S&P futures and the Dow futures have fallen 0.33% and 0.76%, respectively.

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