Moderna shares downgraded to hold from buy by Argus on revenue decline

On Wednesday, Argus made a significant adjustment to its rating on shares of Moderna Inc . (NASDAQ:BMV:MRNA), shifting from "Buy" to "Hold." The decision reflects a reassessment of the biotechnology company's near-term growth prospects. Argus cited Moderna (NASDAQ:MRNA)'s strong performance during the pandemic with its COVID-19 vaccine, which remains updated for emerging variants.

The firm noted that vaccine sales have decreased as the world enters a new phase of the pandemic, reflected in the company's 44.29% revenue decline over the last twelve months. InvestingPro data shows the stock has fallen nearly 70% in the past six months, with analysts anticipating further sales decline this year.

Moderna, known for its messenger RNA-based therapeutics and vaccines, also has an mRNA vaccine for Respiratory Syncytial Virus (RSV) among its two approved products. Despite the RSV vaccine's robust protection, its market impact has been muted due to its approval coming more than a year after competitors' products, which are already established among healthcare providers.

According to InvestingPro analysis, while the company maintains a strong financial position with a current ratio of 4.39 and more cash than debt, it's currently experiencing weak gross profit margins.

The company's pipeline remains active, with 36 mRNA development candidates across 45 programs. Nonetheless, these are in various stages of development and will require further investment and time before they can contribute to market sales. Argus maintained a positive outlook on Moderna's long-term potential, keeping a "Buy" rating for the five-year horizon.

Argus's revised rating reflects a cautious stance on Moderna's stock performance over the next 12 months. The firm suggests that the stock's upside is currently limited, but an upgrade could be considered if Moderna demonstrates a return to earnings growth and successfully brings more of its product candidates to market.

In other recent news, Moderna Inc . has seen significant developments across various fronts. The company reported a robust third quarter financial performance in 2024 with revenues reaching $1.9 billion and net income of $13 million.

Despite concerns raised by Leerink Partners and Berenberg about the success of Moderna's Phase 3 CMVictory study and the company's ability to achieve its medium-term financial goals, Moderna maintains a strong balance sheet with more cash than debt.

Moderna's mRESVIA vaccine has received approval in Canada, which is a significant milestone for the company. This approval follows its authorization in the United States, Europe, and Qatar, highlighting Moderna's growing global presence in the field of mRNA vaccines.

In addition, Moderna has revealed plans to release eight new vaccines by 2028, which analysts from Piper Sandler anticipate will boost sales after a projected low in 2025.

Analyst firms Berenberg, Piper Sandler, and TD Cowen have provided their perspectives on Moderna's stock. Berenberg initiated coverage on Moderna with a Hold rating, citing potential difficulties for the company in reaching a break-even status.

Piper Sandler, while lowering its price target for Moderna to $69, maintained an Overweight rating, indicating potential growth for the company despite near-term market pressures. TD Cowen also revised its price target downward to $55 but kept a Hold rating. These recent developments reflect the ongoing progress and potential for growth of Moderna.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.