Deutsche Bank analyst Emmanuel Papadakis has trimmed his price target on Moderna (NASDAQ:MRNA), predicting a slowdown in the biotech’s prospects in COVID-19 and flu as well as certain additional efforts.
However, Papadakis maintains the Hold rating on the stock. The new per share target lowered to $155 from $175 implies a premium of ~14% to the last close.
In January, the analyst upgraded Moderna (MRNA) to Hold from Sell, citing a compelling valuation. Following the company’s Q4 2021 results, Papadakis observes better-than-expected share buybacks with the potential to offset a potential rise in opex and the 2022 sales outlook, which assumed no contribution from the U.S.
“Net-net that leaves us feeling largely unmoved from our upgrade note perspectives,” the analyst wrote. Papadakis added that these levels of Moderna (MRNA) shares indicate a “good fundamental valuation,” as he pointed to Moderna’s (MRNA) balance sheet, “COVID/flu seasonal run rate and upside optionality from multiple additional efforts.”
However, the analyst argues that the latter are more or less “skewed” towards the next year. And with a potential delay in the development of a flu candidate, the near-term support for sentiment in Moderna (MRNA) is largely dependent on upcoming proof of concept data in propionic acidemia (PA), methylmalonic acidemia (MMA), and personalized cancer vaccine (PCV), according to the analyst.
Currently, Moderna (MRNA) expects Phase 2 data for the PCV candidate in Q4 2022. Meanwhile, the company is also advancing mRNA-3705 and mRNA-3927 in Phase 1/2 Landmark study for MMA and Phase 1/2 Paramount study in PA, respectively.