Rothschild Redburn analyst Simon Baker downgraded Moderna to Sell from Neutral, doubling his price target to $81 from $40 while citing valuation concerns after the stock's 527 percent surge on cancer vaccine momentum. The stock trades at $150.81, implying roughly 46 percent downside to the new target.
Rothschild Redburn cut Moderna to Sell from Neutral, doubling its price target to $81 from $40 as a 527 percent rally outran clinical evidence.
"Moderna's recent data for its cancer vaccine in melanoma was undoubtedly good, building on earlier successes," Simon Baker, analyst at Rothschild Redburn, said in a note to clients. "However, the overexuberant reaction to the news is beyond our reconciliation under any plausible scenario, leaving the stock considerably overvalued, in our view."
The downgrade follows positive interim results from the phase 3 INTerpath-001 trial announced Aug. 19. Moderna and Merck & Co reported that intismeran autogene plus Keytruda achieved statistically significant improvements in recurrence-free survival and distant metastasis-free survival versus Keytruda alone in patients with completely resected stage IIB-IV melanoma. The results marked the first positive phase 3 development for a cancer vaccine, sending shares up 177 percent that day.
Moderna trades at $150.81 with a market capitalization of $60.21 billion, or 8.91 times book value. The stock has climbed 411 percent year to date but sits 14 percent below its Aug. 19 closing level. Baker raised forecasts for Moderna's mRNA-based individualized neoantigen therapy but said the share price reaction implies near-ubiquitous usage across tumor types for which little or no data exists.
The call runs against Street consensus. Of 24 analysts covering Moderna, two-thirds rate the stock Hold, while just two carry Sell ratings, according to LSEG data. Argus upgraded Moderna to Buy with a $180 target, Wolfe Research moved to Peerperform from Underperform, and BofA Securities lifted its rating to Neutral with a $170 target following the trial results.
Moderna also announced a proposed private placement of $2 billion in convertible senior notes due 2032, with an option for initial purchasers to acquire an additional $300 million. The offering targets qualified institutional buyers under Rule 144A.
The Sell rating implies roughly 46 percent downside from Wednesday's close, and shares fell nearly 2 percent in premarket trading after the downgrade. Investors will watch for additional phase 3 data across other tumor types and the company's next earnings call for updated guidance on the intismeran program.
This article is for informational purposes only and does not constitute investment advice.
