- The Nasdaq on Monday announced that Moderna will be added to its Nasdaq 100 index in July.
- Shares of Moderna surged as much as 18% Monday.
- On Monday, Jefferies initiated coverage of Moderna with a “buy” rating and a price target of $90 on the potential that the pharmaceutical company’s COVID-19 vaccine is approved.
- That represents 45% upside from where shares of Moderna closed on Friday. Jefferies also thinks that if the COVID-19 vaccine is approved, it could generate more than $5 billion in annual sales at its peak.
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Shares of Moderna surged as much as 19% to $74.45 on Monday on news that it will be added to the Nasdaq 100 and a bullish analyst upgrade.
Monday morning, the Nasdaq announced that Moderna will be added to its Nasdaq 100 index prior to market open July 20. Moderna will replace CoStar Group in the index, according to a press release.
In addition, Jefferies initiated coverage of the pharmaceutical company Monday with a “buy” rating and a $90 price target, representing 45% upside from where the stock closed Friday. Shares of Moderna surged as much as 18% Monday.
The bullish rating hinges on Moderna’s COVID-19 vaccine working and resulting in large government supply contracts, Jefferies equity analyst Michael Yee wrote in a Monday note.
“We think there is a good probability Moderna’s vaccine will work and get at least emergency use authorization in 2021,” Yee wrote. “We think a viable vaccine can generate billions in sales, which we see as reasonable given there would be high demand over the first 1-2 years.”
In the first full year of sales of its potential vaccine, Jefferies’ model shows it could bring in $2 billion worldwide if roughly 50 million people get the vaccine at $50. This could grow to a peak of $5 billion between 2025 and 2026, according to the note.
There is also further upside, according to Yee, if significantly more people get the vaccine and the price is pushed higher. “This can quickly get to big numbers of $10-20B+ in theory,” said Yee.
There are other catalysts that could drive shares of Moderna higher, including publication of the phase 1 details, preliminary data from the phase 2 study of patients in mid-2020, and potential phase 3 prevention data this year or next, or anticipated emergency use authorization or accelerated approval of its COVID-19 vaccine.