The Stock of Moderna Soars 10% to Lead S&P 500 Gainers After Oppenheimer Upgrades It to Buy

Moderna Inc. experienced a significant surge in its stock value, climbing by 10% on Tuesday, making it the leading gainer in the S&P 500 index. This surge followed Oppenheimer's decision to upgrade the stock to a buy equivalent, accompanied by a forecast that anticipates Moderna securing approval for five biotech products by the year 2026.

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Headed by analyst Hartaj Singh, the team at Oppenheimer raised Moderna's stock (MRNA) from perform to outperform, expressing optimism that the company's performance in the current year will surpass the lackluster results observed in 2023. Despite currently possessing only one approved product, the mRNA-based COVID-19 vaccine, which has already reached its peak sales, Moderna boasts a promising pipeline featuring potential vaccines for flu and respiratory syncytial virus (RSV). Oppenheimer predicts regulatory approval for these developments in the medium term.

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In a communication to clients, the analysts conveyed their anticipation of top-line sales growth starting in 2025, driven by the launch of multiple products within the next 12-18 months, such as those targeting RSV and influenza. Additionally, the analysts foresee significant clinical and regulatory developments (INT, CMV) during this timeframe, contributing to their bullish outlook on the company.

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Cytomegalovirus (CMV), a member of the herpes family, is among the targets of Moderna's research, along with the development of a cancer vaccine initially focused on melanoma patients. Oppenheimer noted that concerns about the progress of Moderna's pipeline led to a downgrade in August. However, the analysts acknowledged that the company has since addressed these concerns. Despite a 40% decline in the stock value over the past 12 months due to the compression of COVID vaccine sales, the analyst team expects sales to reach a low point in 2024 before rebounding in 2025. This rebound is expected to be fueled by increased education and spending on booster awareness.

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The analysts predict a significant decline in Moderna's operating expenses in 2024 and 2025, followed by an increase afterward. They estimate that the company will continue to incur losses through 2026, contrary to the Bloomberg consensus, which extends the projected losses into 2027. Notably, Moderna has indicated its willingness to adjust operating expenses if sales progression flattens or stalls.

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Oppenheimer assigned a 12- to 18-month price target of $142 for Moderna's stock, reflecting a more than 30% upside from its current price. This positive development for Moderna also had a ripple effect, boosting the stock prices of other vaccine and drug manufacturers such as Bristol-Myers Squibb, Pfizer, and Merck & Co.