Is Moderna Stock A Sell With A Covid Vaccine Sales Cliff Expected In 2023?

Estimated read time 6 min read


Moderna stock is hitting resistance at its 50-day line as projections for Covid vaccine sales beyond 2022 dim.




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For the year, Moderna (MRNA) still expects $21 billion in purchase agreements for its two-dose Covid shot. That was narrowly below forecasts, which analysts have since revised to $22.15 billion. But in 2023, analysts expect Moderna to report less than half that — $9.96 billion.

Moderna is focusing on expanding its efforts beyond Covid. The company has four drugs entering final-phase testing this quarter, including three that target non-Covid respiratory viruses. Three products could launch over the next two to three years. In May, the company launched a study of an HIV vaccine in Africa. It’s also based on messenger RNA technology.

“This is just the beginning,” Chief Executive Stephane Bancel said of the messenger RNA behind the company’s efforts. Moderna’s technology relies on manipulating messenger RNA, or mRNA, the body’s mechanism for creating proteins, to induce specific responses.

Yet, Moderna stock remains under pressure and has fallen by double digits since November. The Food and Drug Administration is on deck to discuss its Covid vaccine for children under the age of 6 later this month. The agency will also discuss Pfizer (PFE) and BioNTech‘s (BNTX) vaccine for children younger than 5.

So, all in all, is Moderna stock a buy or a sell today?

A Fundamental Look At Moderna Stock

By all measures, the first quarter represented a beat for Moderna. The company earned $8.58 per share on $6.07 billion in sales, rocketing a respective 202% and 213% year over year.

The Covid vaccine, dubbed Spikevax, brought in $5.93 billion in sales with the remainder coming from collaboration money and grants.

Next, Moderna hopes to launch its two-dose Covid vaccine for children 6 months to under 6 years old. Pfizer’s BioNTech-partnered vaccine is allowed for children as young as 5. Pfizer’s vaccine was 80.3% effective, while Moderna said its regimen was 37%-51% effective.

Importantly, first-quarter sales and earnings growth was in line with CAN SLIM advice. Investors are advised to seek companies with at least 20%-25% recent earnings growth.

But the question for Moderna stock remains how long it can sustain such bullish growth. Analysts currently expect sales to plummet in 2023 as Covid enters its endemic phase. In the second quarter, analysts expect Moderna to earn $4.74 per share on $4.23 billion in sales. Earnings would decline 27% and sales would inch down about 3%.

Moderna stock has a Composite Rating of 55 out of a best-possible 99. The Composite Rating is a measure of a stock’s key fundamental and technical measures. So MRNA stock ranks in the top half of all stocks on that measure.

What Do Annual Metrics Say?

Moderna stock went public at 23 in late 2018. In 2020, shares rocketed more than 434%. The gain was less bullish in 2021 with shares rising 143%.

Fundamentals improved in 2021 following the late 2020 launch of Moderna’s Covid vaccine. In 2021, Moderna earned $28.29 per share on $18.47 billion in sales. Earnings turned around from a year-earlier loss and sales skyrocketed.

Longer-term, Moderna is working on an omicron-specific booster and a multivalent vaccine that could prevent the original virus and, possibly, multiple strains. But after hitting a peak north of $22 billion this year, analysts expect Moderna’s sales to fall by more than half in 2023.

Moderna is also targeting flu, respiratory syncytial virus and cytomegalovirus with vaccines. It’s also testing treatments for rare diseases and cancer. This year, the company inked a deal with privately held Carisma Therapeutics in cancer treatment.

The market for Covid boosters could also remain intact for some time. The FDA now allows two rounds of messenger RNA boosters — depending on age and immune conditions.

Moderna expects $21 billion in sales of its Covid vaccine this year, plus a potential $500 million in optional doses. That number is likely to increase with Moderna in negotiations for additional doses. The company expects sales to be backend-loaded this year as Covid becomes endemic.

Now, MRNA stock analysts project $22.15 billion in 2022 sales and $27.88 in adjusted earnings per share. Sales would rise 20%, but earnings would dip 1.4%.

Moderna Stock: Technical Analysis

Moderna stock isn’t currently forming a chart pattern, according to MarketSmith.com. Investors are encouraged to buy a stock when it tops a buy point.

Shares are trading at a ceiling below their 50-day moving average. They are also well below their 200-day line.

MRNA stock has a Relative Strength Rating of 19. The RS Rating is a 1-99 measure of a stock’s 12-month performance. This means Moderna stock ranks in the bottom one-fifth of all stocks on that metric.

MRNA stock also has an EPS Rating of 78, still reflecting years of per-share losses.

Keep tabs on IBD Digital for more on stock ratings.

Covid Vaccine Facing Competition

In late January, the FDA fully approved Moderna’s Covid vaccine for adults. Pfizer and BioNTech have approval for people age 16 and older. This means those vaccines can stay on the market after the Covid pandemic ends. They can also change the price and market directly to consumers.

Now, the companies are launching a second round of boosters for people age 50 and older, as well as people as young as 12 with immune system complications.

The FDA’s Vaccines and Related Biological Products Advisory Committee will meet this month to discuss pediatric Covid shots from Pfizer/BioNTech and Moderna.

Moderna is also updating its application to vaccinate teens age 12-17, and is actively submitting data to the FDA in the hopes of snagging authorization for children age 6 to under 12. Pfizer’s vaccine is already allowed for children as young as 5.

So, Is Moderna Stock A Buy Or Sell Right Now?

Moderna stock isn’t a buy right now. Shares aren’t forming a definitive chart pattern.

The company has managed to put together strong sales growth. Analysts expect that to continue this year. Further, they see the company as solidly profitable in the near future. But analysts call for both metrics to decline in 2023.

Shares have a weak RS Rating and the company’s Composite Rating is below the upper echelon of stocks.

It will be important to watch Moderna’s post-Covid efforts. That could help stoke both MRNA stock and the biotech company’s financials.

To find the best stocks to buy and watch, check out IBD Stock Lists. Make sure to also keep tabs on stocks to buy or sell.

Follow Allison Gatlin on Twitter at @IBD_AGatlin.

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