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On Tuesday, Berenberg initiated coverage on Moderna (NASDAQ:MRNA), traded on NASDAQ:MRNA stock, with a Hold rating and a price target of $42.00. The firm cited concerns over the biotechnology company's ability to achieve its medium-term financial goals.
The analyst pointed to the potential difficulties Moderna may face in reaching a break-even status, attributing this to the commercial challenges within its respiratory vaccine franchise and a high level of expenditure on research and development (R&D).
The firm compared Moderna's financial situation unfavorably to that of its peer BioNTech (NASDAQ:BNTX), noting Moderna's higher burn rate and a weaker balance sheet, which could make it more vulnerable to any commercial setbacks.
Berenberg's outlook also incorporates the expectation of continued low vaccination rates, which could be further impacted by the recent election of President-elect Trump. The firm suggests that this could introduce additional risk and uncertainty into Moderna's operations.
Despite recognizing the positive outcomes from Moderna's individualized cancer vaccine, Berenberg remains cautious about the company's near-term prospects. The firm acknowledges the strength of Moderna's platform, yet it also expects that the company will face ongoing challenges that are likely to affect its stock performance.
The analyst's commentary reflects a guarded stance on the company's future, with expectations of potential further downgrades to Moderna's near- and medium-term forecasts. Berenberg's initiation of coverage with a Hold rating indicates a neutral position on the stock, advising investors to maintain their current holdings without adding more shares or selling existing ones at this time.
In other recent news, Moderna has been the subject of several significant developments. Piper Sandler lowered its price target for Moderna to $69, maintaining an Overweight rating despite current market pressures. This move was followed by TD Cowen, which revised its price target downward to $55, though it kept a Hold rating.
Despite these adjustments, both firms see potential in Moderna's future, especially given its projected revenues of $3 billion to $3.5 billion for 2024.
Moderna has also announced its intention to release eight new vaccines by 2028, which Piper Sandler anticipates will boost sales after a projected low in 2025. Meanwhile, Moderna's mRESVIA vaccine has gained approval in Canada, marking another significant milestone for the company.
Adding to these recent developments, Moderna's third-quarter financial performance in 2024 reported revenues of $1.9 billion and a net income of $13 million.
The company's financial outlook remains strong, with plans to purchase its Norwood campus for $400 million and the anticipation of multiple vaccine approvals in the coming years. These recent developments underscore Moderna's ongoing progress and potential for growth.
InvestingPro Insights
Recent data from InvestingPro aligns with Berenberg's cautious stance on Moderna (NASDAQ:MRNA). The company's financial metrics reveal significant challenges, with a revenue decline of 44.29% in the last twelve months as of Q3 2024, and a negative gross profit of $1.4 billion during the same period. These figures support Berenberg's concerns about Moderna's ability to achieve its medium-term financial goals.
InvestingPro Tips highlight that Moderna is "quickly burning through cash" and "suffers from weak gross profit margins," which corroborates the analyst's comparison to BioNTech and concerns about Moderna's higher burn rate. The stock's recent performance also reflects these challenges, with InvestingPro data showing a 56.08% price decline over the last three months.
Despite these headwinds, it's worth noting that Moderna "holds more cash than debt on its balance sheet" and "liquid assets exceed short term obligations," which may provide some financial flexibility as the company navigates its current challenges.
For investors seeking a more comprehensive analysis, InvestingPro offers 15 additional tips for Moderna, providing a deeper understanding of the company's financial health and market position.
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