Moderna Rallies After Q4 Earnings: What 2 Analysts Have To Say About COVID-19 Stock

Moderna, Inc. (NASDAQ: MRNA) reported better-than-expected fourth-quarter earnings Thursday and announced a slight upward revision to its vaccine sales forecast for 2022. The company also announced a $3-billion stock buyback.

The stock rallied 15.1% in Thursday's trading session. Here's what two analysts had to say about the earnings results. 

The Moderna Analysts: Needham analyst Joseph Stringer maintained a Hold rating on Moderna.

SVB Leerink analyst Mani Foroohar has an Underperform rating.

Vaccine Expectations Fully Priced In, Needham Says: Moderna's fourth-quarter sales comprised $700 million from the U.S., equating to 45 million doses, and $6.1 billion from outside of the U.S., equivalent to 252 million doses, Stringer said.

The company said it's in active talks globally for additional Spikevax advance purchase agreements, or APA, in 2022, the analyst noted. Sales will likely be higher in the second half relative to the first half due to the Northern Hemisphere entering fall/winter booster season and due to an expected shift to a COVID endemic phase, he added.

Needham estimates first-quarter and 2022 sales of $6 billion and $22 billion, respectively, the analyst said.

The company also announced a new bivalent booster candidate, combining an omicron-specific candidate and its mRNA-1273 vaccine, Stringer noted.

"We believe the success and expectations around Spikevax are currently fully reflected in the stock."  

Related Link: Moderna Rallies After Earnings Print: Could A Technical Reversal Be In Sight?

SVB Leerink Sees More Risk Than Reward To Moderna's Strategies: The expectations that the revenue growth projected for the second half of 2022 will materialize bring risk, Foroohar said.

As the U.S. revenues continue to decline and revenue mix shifts to lower income segments of the ex-U.S. market, the company expects a lower realized price, the analyst noted.

Manufacturing costs will likely increase as the virus moves into the endemic stage, as vaccines for this setting will have to be packaged/sized differently from the ones meant for mass vaccination, he added.

Adolescent approval in the U.S. may not occur soon, the analyst said.

"The company continues to pursue a variety of constructs and combinations targeting variants of the virus, in hopes that there will be a market opportunity for one of these products, as the COVID landscape continues to evolve," Foroohar said.

SVB Leerink is not in agreement with the company's view that it can get its existing flu vaccine construct across the finish line without explicit evidence of clinical benefit in a Phase 3 study, the analyst said.

The company's logic of allocating capital to buybacks, especially as the shares remain overvalued, may not be a sound strategy, Foroohar said. Instead, the company could have been more aggressive with diversifying M&A, he said.

SVB Leerink noted that the company is planning to double down on spend in the internal pipeline to develop novel products in order to backfill declining COVID sales.

"We continue to see more risk than reward for MRNA shares," the firm said.

MRNA Price Action: Moderna shares closed at $156.23 Thursday, up 15.1%.