Moderna Stock Shakes Off Recall Repercussions

Moderna (MRNA) disclosed the presence of a “foreign body” in one of the COVID-19 vaccine vials distributed in Europe, which resulted in the withdrawal of the whole lot, consisting of 764,900 doses, from the market. MRNA stock shook off this news, as the stock closed higher on Friday following the recall.

The lot was manufactured by ROVI Pharma Industrial Services’ unit in Spain and distributed in Norway, Poland, Portugal, Spain, and Sweden. The company informed customers that the vial was found to be punctured and not given to any adult.

Moderna has found no other complaints regarding the lot so far but is still recalling all the doses “out of an abundance of caution.” As per the company, the material found in the concerned vial is of no risk to other vials of the lot and has no impact on the significant benefit/risk profile of the vaccine.

Wall Street’s Take

Last week, Brookline Capital Markets analyst Leah R. Cann maintained a Buy rating on Moderna with a price target of $506 (221.9% upside potential from current levels).

The analyst said, “Our current expectations only include the HIV vaccine program, which combined with Moderna’s second HIV program, mRNA-1574, is anticipated to enter the market in 2026, and we estimate sales from these two programs, mRNA-1644 and mRNA-1574, combined could be more than $13 billion in 2030, making this the third-largest contributor to Moderna’s estimated 2030 sales.

“Based on the unmet need and market sizes for TB and enteric pathogens, these settings could provide upside to our total 2030 revenue outlook.”

Meanwhile, the rest of the Street is cautiously optimistic about the stock, with a Moderate Buy consensus rating based on five Buys, seven Holds, and one Sell. The average Moderna price forecast of $247.20 implies 57.3% upside potential from current levels.

Hedge Fund Trading Activity

TipRanks’ Hedge Fund Trading Activity tool shows that confidence in Moderna is currently Very Negative, as all 15 hedge funds that were active in the last quarter cumulatively sold 5.3 million shares of the company.

Takeaway

Moderna has been one of the key vaccine manufacturers during this pandemic and is the second vaccine to have received FDA’s full approval in January 2022. Despite this incident, investors’ are likely to keep their trust in the company.

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