(Bloomberg) -- Moderna Inc. got its second downgrade ever after a JPMorgan analyst dropped his rating to neutral from overweight, citing the stock’s more than six-fold increase over the past 12 months.
“This stock move itself isn’t entirely surprising given the rapid execution on mRNA-1273, the tremendous widespread investor interest on this program, and the obvious unmet need / opportunity for a Covid-19 vaccine,” analyst Cory Kasimov wrote of Moderna’s experimental Covid-19 shot.
The cut is not based on the outlook on Moderna’s vaccine or messenger-RNA platform, for which the analyst remains bullish. However, Kasimov writes in a note that questions remain on how long the pandemic will last, how a vaccine could be priced and what sort of competition Moderna will face. For now, Kasimov and his team recommend investors stay on the sidelines.
Key results on Monday for a competing Covid-19 inoculation that the University of Oxford developed with AstraZeneca Plc as well as additional details of a rival messenger-RNA vaccine from Pfizer Inc and BioNtech SE also helped knock Moderna shares. Kasimov notes that while multiple programs from different sources will be needed, investors will no doubt be trying to make cross-trial comparisons.
Moderna’s shares fell as much as 17.7% intraday for the biggest drop in nearly two months, marring an otherwise big day for the Cambridge, Massachusetts based biotech, which joined the Nasdaq-100 index on Monday.
Results from Astra’s program were likely to show “promising T cell responses with neutralizing antibody titers potentially lower than what mRNA-1273 has shown,” Kasimov said before the data were disclosed.
Of the 15 analysts tracked by Bloomberg, 13 still rate Moderna a buy while two recommend holding and no one recommends selling the stock. BofA analysts cut their Moderna rating in March, when shares were trading below $30. The stock has more than tripled since then.
(Updates Moderna shares, adds Astra, Pfizer reports)
©2020 Bloomberg L.P.
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