Moderna, Inc.

NASDAQ Global Select
Back to all articles
Bearish -65

Moderna is now overvalued after cancer vaccine-led stock surge, Rothschild & Co. says

AI-generated analysis

📉 Rothschild & Co Redburn downgraded Moderna stock from neutral to sell, citing that the company is now 'considerably overvalued' following a recent surge.

💰 Analyst Simon Baker increased the price target to $81 from $40, though this still implies 46% downside from Wednesday's closing price.

🧬 Moderna's experimental melanoma vaccine yielded positive results in a late-stage trial developed in partnership with Merck on August 19.

📈 Shares surged 177% on the day of the positive trial announcement but have since lost steam and closed 14% below that peak level.

⚠️ Rothschild argues the stock price implies ubiquitous usage across tumor types despite little or no data supporting efficacy against other cancers.

📊 The company's stock is up 411% year-to-date, contrasting with the bearish analyst call which suggests limited near-term upside.

📉 Following the downgrade, MRNA shares fell nearly 2% in premarket trading before the article was published.

🏛️ Of the 24 analysts covering Moderna, two-thirds hold a neutral rating while only two have a sell rating according to LSEG data.

Bullish Signals
  • Moderna recently reported positive results for its experimental melanoma vaccine in a late-stage trial developed in partnership with Merck.
  • The company's stock has gained 411% year-to-date following the successful clinical data release.
  • Analyst Simon Baker acknowledged that the recent data for the cancer vaccine was 'undoubtedly good' and built on earlier successes.
Risk Factors
  • Rothschild & Co Redburn downgraded the stock to sell, stating it is now 'considerably overvalued' after a stock surge.
  • The analyst increased the price target to $81 from $40, which still implies 46% downside from Wednesday's close.
  • Rothschild argues the share price reaction implies near-ubiquitous usage across tumor types for which there has been little or no data.
  • The stock closed 14% below its August 19 closing level, suggesting limited room to run in the near-term according to the firm.
  • Shares fell nearly 2% in premarket trading following the analyst downgrade and negative commentary on valuation.
Full Analysis
Moderna (MRNA) shares have retreated significantly following a sharp surge driven by positive late-stage trial results for its experimental melanoma cancer vaccine developed in partnership with Merck. While the company recently reported good data, Rothschild & Co Redburn argues that the stock is now 'considerably overvalued' due to an exuberant market reaction that exceeds plausible scenarios given limited efficacy data for other cancer types. Rothschild analyst Simon Baker downgraded Moderna from a neutral rating to sell, citing that the subsequent share price action implies near-ubiquitous usage across tumor types without sufficient supporting data. Despite the recent positive trial news, the stock has lost momentum and closed 14% below its peak levels set on August 19, suggesting limited room for further near-term gains according to the research firm. The analyst note highlights a divergence between market sentiment and consensus views, noting that while Moderna's shares are up 411% year-to-date, the specific valuation premium is difficult to reconcile with current data availability. The downgrade contrasts with the broader Street consensus, where two-thirds of analysts maintain hold ratings on the biotechnology stock. Following the Rothschild downgrade, MRNA shares fell nearly 2% in premarket trading. The firm maintains that while the melanoma vaccine results were undoubtedly good and built on earlier successes, the current valuation does not reflect the uncertainty regarding the drug's performance against other cancer types.