Analysts are of the Opinion That The Valuation of MRNA Stock Needs a Haircut


With the entire year being quite tumultuous, both Main and Wall Street have been celebrating the MRNA stock as it leads towards hope. With some very positive data over their last stage tests, the pharma company might just be Godsend in ending the pandemic. For, the vaccine programs of both MRNA and BNTX have been upending their inventory looking for a vaccine that will end this crisis. Yet, Mani Foroohar, an analyst from Leerink believes that there is one outlook out of these implications that might not be as positive. Foroohar believes that the investment thesis of the MRNA stock might not be as solid as it looks to be.

The MRNA stock has been rated as Underperform with a price target of $60. If the thesis put forward by this analyst plays out, most investors could be looking at a drop in the prices by 53%.  

What seems to be the Downbeat Assessment?

Foroohar mentioned that since the entire world was in the middle of global buildout- something similar to a Manhattan project for vaccines, there is excess capacity in the market. Also, the intensity is at an all-time high and coupled with the pricing power being limited, has presented several challenges to a player like the MRNA stock. 

Interestingly, the very assessment of Foroohar seems to be running completely against what the general consensus has been. With MRNA stock releasing favorable data on its Phase 3 tests for the Covid-19 vaccine, the company is being seen in a different light. 

Although Foroohar has increased the estimated revenue from the mRNA-1273 from $2.4 to $4.5 billion, it will take some time for MRNA stocks to fall. Sure, there is an increasing possibility of an eroding market for revaccination, but that will take some time. And even if that were to be the case, it seems likely that Moderna would probably just assist Pfizer and BioNTech. 

What Seems to be The Course of Action for MRNA Stock?

Also, the shares of this company have been going up by 550% year-to-date and are already looking to increase their shares beyond making vaccines for COVID-19. Foroohar believes the other options that MRNA stock have in hand- simply don’t cut it. 

The analyst further mentioned that everywhere else they would be seeing companies of MRNAs stature using near-term news flow in order to drive out outperformance. This has resulted in the absence of a probable and clear catalyst for resetting higher shares. It also makes it difficult to bring out current valuation schemes, and other expectations that bring out risk-reward equations with the investors. 

Currently, Foroohar is a minority in the WSE. And according to its analysts, the MRNA stock has been accruing 8 buys, 2 sells, and 4 holds.