Jefferies cuts Moderna target to $120, retains buy rating
On Thursday, Jefferies, a global financial services company, revised its price target for Moderna (NASDAQ:) shares, listed on NASDAQ:MRNA, from $180.00 to $120.00, while still recommending a Buy rating. The adjustment follows Moderna’s announcement earlier this week that it expects a reduction in its 2024 revenue forecast by $500 million to $1 billion. This anticipated decrease is attributed to lower Covid-19 vaccine pricing, deferrals in the Advanced Purchase Agreements (APA), and modest revenue expectations from its Respiratory Syncytial Virus (RSV) vaccine for the current year.
Moderna’s revised guidance has raised concerns among investors, especially given the company’s current financial performance, which includes significant losses and negative free cash flow. The financial services firm highlighted the challenges facing Moderna, noting that the larger-than-anticipated reduction in guidance could lead to increased cash burn. Projections suggest that Moderna’s year-end cash reserves could decline from $9 billion in 2024 to $6 billion by the end of 2025.
The statement from Jefferies pointed out that while the market had some anticipation of a guidance cut, the extent was more severe than expected. This has led to discussions regarding the credibility of Moderna’s financial management. The analyst from Jefferies emphasized the need for Moderna to implement substantial cost reductions swiftly in order to improve its profit and loss statement and reverse the negative trend.
In other recent news, Moderna Inc. has seen a variety of developments. The company recently announced a reduction in its 2024 sales forecast for its COVID-19 and Respiratory Syncytial Virus (RSV) vaccines, predicting a decrease of up to $1 billion. This comes amidst challenging sales projections to the European Union and potential deferrals in revenue recognition for some international COVID-19 sales into 2025. Despite the reduction, Moderna anticipates a return to sales growth in 2025.
The company has also been awarded a $176 million grant from the U.S. government for the advancement of mRNA-based vaccines targeting pandemic influenza strains. This investment supports the late-stage development required for the vaccine’s licensure, with additional provisions to prepare for and expedite responses to future public health emergencies.
Analyst firms like Jefferies, Argus, and TD Cowen have updated their price targets and ratings on Moderna’s shares. Jefferies revised its price target for Moderna shares from $180.00 to $120.00, still recommending a Buy rating. Meanwhile, Argus increased its price target on Moderna shares to $150, maintaining a Buy rating, and TD Cowen maintained a Hold rating with a set price target of $75.00.
InvestingPro Insights
Jefferies’ recent price target revision for Moderna coincides with some intriguing metrics and expert observations from InvestingPro. Notably, Moderna’s management has been proactively repurchasing shares, which could be a sign of confidence in the company’s intrinsic value. Additionally, Moderna holds a favorable cash-to-debt ratio on its balance sheet, suggesting a solid liquidity position. This is particularly relevant considering the company’s anticipated sales decline and the need for strategic financial management highlighted by Jefferies.
InvestingPro Data further reveals a market capitalization of $36.12 billion, reflecting the company’s substantial size in the biotech industry. Despite a concerning revenue decline of 65.78% over the last twelve months as of Q1 2024, Moderna’s stock has experienced a 19.88% year-to-date price total return, indicating some recovery in investor sentiment. However, the company’s P/E ratio stands at -7.71, emphasizing the lack of profitability in the same period.
These insights, coupled with the 11 additional InvestingPro Tips available, provide a nuanced understanding of Moderna’s financial health and market performance. Investors seeking a deeper analysis may find value in the comprehensive tips and data offered by InvestingPro.
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