Mixed Q2 Results for Moderna as COVID-19 Vaccine Sales Decline

Bank of America's Geoff Meacham lowered their price target on Moderna (NASDAQ: MRNA) by 14.3% from $175 to $150 on 2023/08/04. The analyst maintained their Hold rating on the stock.

In their report, Meacham explained that the reduction in price target was due to "increased operating expense spending expectations and reduced terminal growth to reflect the changing clinical and commercial landscape." The analyst also highlighted that investors are primarily focused on COVID-19 durability concerns and the pipeline.

Moderna's Q2 2023 results were mixed. The company reported a loss per share of $3.62, which beat the Zacks Consensus Estimate of $(3.84) but was significantly lower than the EPS of $5.24 in Q2 2022. Revenue for the quarter was $344 million, surpassing the Zacks Consensus Estimate of $290.7 million. However, it was down 93% year-over-year due to lower COVID-19 vaccine sales.

Looking ahead, Moderna's management provided guidance for FY 2023. They expect COVID-19 vaccine sales to range from $6 billion to $8 billion, depending on U.S. vaccination rates, an increase from the previous guidance of $5 billion. The company also anticipates combined R&D and SG&A expenses of $6 billion, with $4.5 billion allocated to R&D. Additionally, Moderna plans to invest $1 billion in capital expenditures.

CEO Stéphane Bancel expressed satisfaction with the company's Q2 sales performance, attributing any seasonal fluctuations to the nature of COVID-19. Bancel also highlighted the progress made by Moderna's U.S. commercial team in securing new contracts for the fall of 2023. The CEO reiterated Moderna's commitment to delivering sales between $6 billion to $8 billion in 2023, contingent on COVID-19 vaccination rates in the U.S. Bancel also emphasized the strength of Moderna's late-stage clinical pipeline, which includes four infectious disease vaccines in Phase 3, with RSV recently submitted for regulatory approval. The company's individualized neoantigen therapy for melanoma and the lead rare disease program for PA are both in Phase 3 as well.

In addition to Geoff Meacham's report, other analysts also updated their ratings and price targets for Moderna on August 4, 2023. Luca Issi from RBC Capital lowered their price target by 5% from $200 but maintained their Buy rating on the stock. Matthew Harrison from Morgan Stanley lowered their price target by 3.9% from $128 and also maintained their Hold rating. Tyler Van Buren from TD Cowen downgraded their rating on the stock from Buy to Hold and lowered the price target by 13.8% from $145.

Overall, 50% of the top-rated analysts currently rate Moderna as a Strong Buy or Buy, while the remaining 50% see it as a Hold. No analysts recommend or strongly recommend selling the stock.

The consensus forecast among analysts is that Moderna will deliver earnings per share (EPS) of $3.74 for the upcoming year. If the analysts' predictions hold true, Moderna's next yearly EPS will experience a 20.8% increase compared to the previous year.

Since the release of Moderna's latest quarterly report on August 3, 2023, the stock price has declined by 1.6%. Year-over-year, the stock is down 44.3%. During this period, Moderna has underperformed the S&P 500, which is down 8.8%.

Bank of America analyst Geoff Meacham is ranked in the bottom 8% out of 4,290 Wall Street analysts according to WallStreetZen. Meacham specializes in the Healthcare and Technology sectors and has an average return of -3.1% and a 47.3% win rate.

Moderna, Inc. is a biotechnology company based in Cambridge, Massachusetts. The company focuses on discovering, developing, and commercializing messenger RNA therapeutics and vaccines for various diseases, including infectious diseases, immuno-oncology, rare diseases, cardiovascular diseases, and auto-immune diseases. Moderna's portfolio includes respiratory vaccines such as COVID-19, flu, and respiratory syncytial virus vaccines, as well as latent vaccines and public health vaccines. The company also offers systemic secreted and cell surface therapeutics, cancer vaccines, intratumoral immuno-oncology products, and localized and inhaled pulmonary therapeutics. Moderna has strategic alliances with several organizations and collaborations with partners in the healthcare and pharmaceutical industries.

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