Moderna's Rating Cut to Hold as Analyst Stresses Caution on COVID Outlook

TD Cowen's Tyler Van Buren downgraded their rating on Moderna (NASDAQ: MRNA) from Buy to Hold on 2023/08/04. The analyst also lowered their price target by 13.8% from $145 to $125.

Van Buren explained his post Moderna's Q2 2023 earnings report downgrade and price target cut by saying that prudent investors will stay on the sidelines for more clarity on the "COVID tail" from the upcoming fall and winter season. At the moment, the analyst added, near-term catalysts "remain light." Long term, however, the analyst expressed "conviction in the applicability of the company's mRNA platform."

Moderna reported a loss per share of $3.62 for Q2 2023, which beat the Zacks Consensus Estimate of $(3.84) but was down significantly from Q2 2022's EPS of $5.24. The company's revenue for the quarter was $344M, beating the Zacks Consensus Estimate of $290.7M, but down 93% year-over-year due to lower COVID-19 vaccine sales.

Looking ahead to FY 2023, Moderna's management guided for COVID-19 vaccine sales of $6B to $8B, depending on U.S. vaccination rates, up from the previous guidance of $5B. They also expect combined R&D and SG&A expenses of $6B, with $4.5B in R&D, and Capex of $1B. CEO Stéphane Bancel commented on the Q2 sales, stating, "Q2 sales were on target, given the seasonal nature of Covid."

In addition to TD Cowen's rating downgrade, other analysts also updated their ratings on Moderna on August 4, 2023. RBC Capital's Luca Issi lowered their price target by 5% from $200 and maintained their Buy rating on the stock. Morgan Stanley's Matthew Harrison lowered their price target by 3.9% from $128 and maintained their Hold rating on the stock. Bank of America's Geoff Meacham lowered their price target by 14.3% from $175 and maintained their Hold rating on the stock.

Currently, 50% of top-rated analysts rate MRNA 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's upcoming year will deliver earnings per share (EPS) of $3.74. If the analysts are correct, this would represent a 20.8% increase on a year-over-year basis.

Since 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 that period, Moderna has underperformed the S&P 500, which is down 8.8%.

It is important to note that TD Cowen analyst Tyler Van Buren is ranked by WallStreetZen in the bottom 6% out of 4,290 Wall Street analysts, with an average return of -16% and a 30.6% win rate. Van Buren specializes in the Healthcare sector.

Moderna, Inc. is a biotechnology company that focuses on the discovery, development, and commercialization of messenger RNA therapeutics and vaccines for the treatment of various diseases. The company's portfolio includes vaccines for respiratory diseases, latent diseases, and public health diseases. Moderna also offers systemic and localized therapeutics for cancer and other conditions. The company has strategic alliances and collaborations with various organizations and institutions.

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