Morgan Stanley Downgrades Moderna (MRNA) Stock Before Its Meeting with FDA Today

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by Bhushan Akolkar · 2 min read
Morgan Stanley Downgrades Moderna (MRNA) Stock Before Its Meeting with FDA Today
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Morgan Stanley has asked investors not to make any fresh entry in MRNA stock citing potential downside in the short-term. Moderna is having a meeting with the FDA officials later today for approval of its COVID-19 vaccine candidate.

Pharmaceutical giant Moderna Inc is set to receive FDA approval for its COVID-19 vaccine anytime soon. However, Moderna Inc (NASDAQ: MRNA) stock has entered the speculation zone as day traders are not so confident of the approval anytime soon.

On Wednesday, December 16, MRNA stock price tanked nearly 7% closing at $137. The good sign is that in the pre-market trading session today, the stock appears in green. MRNA stock has already appreciated over 600% year-to-date as Moderna has been one of the forerunners in vaccine development.

Wednesday’s price drop comes after Morgan Stanley downgraded the MRNA stock. The banking giant has cut the rating from overweight to equal-weight. The banking giant noted that the further price momentum will depend on “vaccine revenue realization, vaccine competition and long-term COVID-19 revenue sustainability” during 2021.

Later today, Moderna will be appearing in front of the US Food and Drug Administration. The company is waiting on the sidelines for a regulatory after the FDA approved the Pfizer/BioNTech vaccine candidate last week. Morgan Stanley analyst Matthew Harrison cautioned investors saying that don’t have high near-term expectations.

However, he remains positive for the long-term upside while raising the price forecast from $100 to $150. Harrison has asked investors to wait for future opportunities to buy the stock and let it correct. He added:

“We think it’s appropriate to step to the sidelines for now and look for entry points to better realize the potential long-term value”.

Retail Interest Key to Retain MRNA Stock Momentum

Bloomberg states that Moderna’s valuations can be at risk if the retail interest subsides. Pfizer and its German partner BioNech who received an emergency approval have already set the ball rolling.

In addition to Morgan Stanley, Jefferies analyst Michael Yee has also cut the rating overnight to hold from buy. Yee noted the “significant stock run and elevated expectations.”

Some participants available to test the Moderna vaccine has reportedly an immediate reaction after taking the first and second shot. SVB Leerink analyst Mani Foroohar said that most of the adverse events were resolved quickly. However, some side effects continued for weeks.

It is quite possible that the Moderna tock can see some more downside before resuming the rally again.

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Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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