Moderna Stock Is Overvalued by 30%, Says JPMorgan

The importance of booster shots was given further validation on Monday, when Moderna (MRNA) reported that a booster shot of its Covid-19 vaccine mRNA-1273 significantly increased the level of antibodies in the fight against the Omicron variant.

A boost from a 50-milligram dose – or a half dose – increased protection against Omicron by 37 times compared to pre-boost levels, while a full dose of 100 milligrams gave an ~83-fold increase. The Pfizer booster dose, for comparison’s sake, provided a 25-fold increase in protection.

That said, the 100µg dose has yet to be authorized for the broader population (intended for specific immunocompromised patients only), and there were more frequent local and systemic adverse events noted following its administration. As such, Moderna emphasized that it is just providing the data and that the decision to make use of the higher dose was up to the regulators.

Although the company said it hopes to start clinical trials early next year on a vaccine to specifically protect against the Omicron variant, the mRNA-1273 booster dose remains the focal point at present.

As of December 17, of the roughly 200 million ‘fully vaccinated’ US citizens, 60 million have already been administered a booster shot. J.P. Morgan’s Cory Kasimov estimates that by 1Q22, the “majority of the vaccinated population (or at least those who want it)” could be boosted.

While Kasimov lauded the latest positive development, following year-to-date share gains of 165%, the analyst remains weary of Moderna’s lofty valuation.

“MRNA’s preliminary Omicron results are encouraging from a societal point of view and continue to demonstrate the clear importance of boosters to maintain high levels of protection,” the analyst noted. “That said, the update does little to impact our view on marketplace dynamics for the next couple of years. The longer-term durability – and of course size – of the vaccine market remain important but unknown questions from a valuation perspective; MRNA shares still seem to get substantial credit on that front.”

Accordingly, Kasimov’s $165 price target, suggests shares are currently overvalued by ~30%. The analyst’s rating stays a Neutral (i.e. Hold). (To watch Kasimov’s track record, click here)

A Hold rating is also the conclusion reached by the analyst consensus and is based on 6 Buys and Holds, each, plus 3 Sells. However, the $311.83 average target is rather different than Kasimov’s, and indicates shares have room for ~28% growth in the year ahead. (See MRNA stock analysis on TipRanks)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.