Concerns About Moderna Stock’s Future Are Overdone

  • Investors are overly bearish on Moderna’s (MRNA) post-pandemic prospects.
  • This is despite the fact it still has solid Covid-19 and non-Covid-19 catalysts.
  • In time, as it becomes apparent the market has overreacted, MRNA stock could come back into favor.
The Moderna (MRNA) logo surrounded by syringes, pills and disposable face masks.

Source: Ascannio / Shutterstock.com

As has been the case so far in 2022, investors are by-and-large taking a pass on pandemic vaccine plays. That’s the situation here with Moderna (NASDAQ:MRNA). While it rallied alongside the market during March, MRNA stock remains far below the price levels it hit in 2021.

The market isn’t valuing this company on its blockbuster results from 2021, or its still-strong numbers projected for this year. Instead, investors are pricing it on their perception of its long-term prospects.

But take a look at all the facts. It’s apparent that the sentiment about its post-pandemic prospects is too pessimistic. Not only is the company likely to continue generating billions in revenue from Covid-19 vaccines in the coming years, but the company has high-potential non-Covid-19 vaccine offerings in the works as well.

With this in mind, it may be worth a look, while it finds itself out of favor.

Ticker Company Current Price
MRNA Moderna $154.62

The Latest With MRNA Stock

External factors are playing a role in Moderna’s pullback since the start of April. Yet news directly pertaining to the company is playing a larger role. For example, as reported by Reuters on April 5, both the African Union and the global vaccine initiative COVAX have decided to decline the option to buy additional doses of its vaccine (also known as Spikevax).

Also, on April 6, the European Medicines Agency (EMA), Europe’s version of the Food and Drug Administration (FDA), said it was too early to recommend a second booster for the general population.

Both developments have weighed on MRNA stock. After going from the $130’s per share, up to above $175 per share, it has pulled back to the $150’s per share. The stock could continue to flounder in the near-term. The market may stay concerned that Spikevax sales will drop off faster than once expected.

Still, it’s not set in stone that’s going to be the case. While the EMA may be waiting things out with a second booster, that doesn’t mean one will not become available in Europe. It also has little bearing on whether the FDA gives the go-ahead for a second booster in the U.S.

Moderna’s Booster and Non-Covid-19 Catalysts

Sell-side analysts currently anticipate the company to report $21.87 billion in sales this year, versus $18.47 billion in sales last year. However, these same analysts are all over the place with 2023 projections. Some see Moderna’s sales dropping off in a big way (to around $4 billion). Others see sales coming in-line with this year’s numbers ($22.27 billion).

The top end of these estimates may be a bit too optimistic, but this low figure is also overdoing things a bit. As new variants emerge, the call for additional boosters will likely continue. Covid cases could spike again in the northern hemisphere this fall.

The EMA could decide to go-ahead with a second booster. Stateside, like I discussed in my last article on MRNA stock, the FDA could by then have approved a second booster for use among the U.S. general population.

Moderna CEO Stephane Bancel has argued that many may be interested in obtaining yearly covid vaccinations. Besides rolling out new boosters, the company is at work on mRNA vaccines that provide protection against other viruses. It even has in the works a combination vaccine that can protect against Covid-19 and non-Covid-19 viruses.

Bottom Line on Moderna

For now, the market may stay cautious about Moderna shares. We may see more news items pointing to slackening demand for Spikevax. Investors could continue overreacting to them.

Even so, it’s key for you to see for yourself the facts. Dig into the situation, you’ll know full well that its Covid-19-related sales are likely to drop off at a slower pace than currently expected.

There could end up being solid demand for annual Covid-19 vaccinations. Especially as the virus mutates rather than disappears completely. Beyond just Covid-19, Moderna is at work using its mRNA technology to create new vaccines for other common viruses. Future products that tackle viruses like the flu, and/or provide combination coverage, may find big success as well.

Put simply, don’t be hesitant about MRNA stock, despite current sentiment. Once the market becomes more aware of its true prospects, it could recover in a big way.

MRNA stock earns a “B” rating in my Portfolio Grader.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.

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