Moderna Inc (NASDAQ: MRNA) has been a darling for global investors amidst the pandemic. But it failed to maintain a similar reputation at Deutsche Bank on Friday.
Papadakis initiates Moderna with a ‘sell’ rating
In a note this morning, Deutsche’s Emmanuel Papadakis dubbed Moderna a “concept stock” as he assumed coverage with a “sell” rating and a price target of $250 that represents an about 23% downside from here.
The COVID-19 vaccine maker has ridden a wave of disruptive innovation, pandemic serendipity, and management vision (plus a little public funding) to become a concept stock whose valuation looks detached from a problematic assessment of reality.
His outlook contrasts Stephen Weiss’ who currently has Moderna as his largest position ever. Papadakis also initiated coverage of BioNTech on Friday with a “hold” rating and a forecast that the stock could slide about 10% in the coming months.
Papadakis’ bearish case for Moderna Inc
Moderna is expected to generate roughly $20 billion from its COVID-19 vaccine in 2021, and analysts expect its revenue to sustain next year on advanced purchase agreements worth $12 billion for its vaccine in 2022.
Papadakis, however, argues that Moderna will fail to support its current $131 billion valuation unless it continues to generate double-digit billions in sales from its COVID-19 vaccine or create an alternative revenue stream of similar magnitude.
Simply put, he says the prospects for Moderna in a post-pandemic world are bleak. The idea of booster shots does give some hope, but the kind of recurring revenue they’d be able to generate remains to be known.
The post Deutsche Bank: Moderna shares could slide sharply to $250 appeared first on Invezz.