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Investing.com - Needham analyst Joseph Stringer reiterated a Hold rating on Moderna (NASDAQ:MRNA) following the company’s R&D day.
The company announced a $1.5 billion non-dilutive, 5-year debt facility, which provides a capital infusion and financial flexibility according to Needham’s research note. InvestingPro data shows Moderna holds more cash than debt on its balance sheet, with a current ratio of 3.93, though the company is quickly burning through cash with negative free cash flow of $2.65 billion.
Moderna reiterated its guidance for "cash breakeven" in 2028 and projected "up to 10%" revenue growth in 2026, exceeding the current consensus estimate of approximately 7% year-over-year growth. This comes as analysts anticipate a 42% revenue decline for fiscal year 2025, following a 56% drop in the last twelve months.
The company discontinued multiple R&D programs including GSD1a, HSV, and VZV, signaling a strategic shift away from vaccines and toward oncology.
Needham noted that "the MRNA story remains in flux" as the company continues to right-size and diversify its pipeline, with the expanding oncology portfolio expected to play a significant role in the company’s potential turnaround.
In other recent news, Moderna has secured a $1.5 billion credit facility from Ares Management, with an initial draw of $600 million this quarter. This financing will increase the company’s cash guidance for fiscal year 2025 to between $7.1 billion and $7.6 billion. Additionally, Moderna has announced a strategic plan targeting a 10% revenue growth by 2026, with aims to expand its seasonal vaccine franchise from three to potentially six approved products by 2028. The company plans to leverage cash from marketed products to fund its oncology and rare disease programs, expecting to reach cash breakeven by 2028.
On the analyst front, Leerink Partners raised Moderna’s stock price target to $18 from $15, maintaining an Underperform rating. Meanwhile, RBC Capital lowered its price target on Moderna to $25 from $28, retaining a Sector Perform rating, following the company’s announcement of an additional $1 billion in cost savings. These cost savings are planned to be split between 2026 and 2027 as vaccination rates have declined by 28% this year. Moderna’s strategic financial moves and growth plans aim to provide flexibility in managing uncertainties and future opportunities.
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