Moderna surges as covid vaccine sales beat expectations

Moderna (MRNA.US) stock rose over 15.0% during today's session after the vaccine maker posted upbeat quarterly results mainly thanks to high sales of its covid vaccine. Company also implemented a $3 billion share repurchase program and for now maintained its full-year outlook for $21 billion in sales, based on current agreements. However potential authorization of an omicron booster shot could push this number higher.

• Adjusted EPS rose to $5.24 per share, well above market estimates of $4.55, however it is a 18% drop compared to the second quarter of 2021.

• Revenue rose 9% to $4.7 billion compared to last year, beating analysts’ expectations of $4.1 billion. That included $4.53 billion from the Covid shot, Spikevax. The remainder came from grants and collaborations.

• Analysts from research firm Third Bridge expect that  "the U.S. booster market potentially could represent over $7 billion annually for the next several years even if ongoing booster shots only focus on the 50 years of age and older cohort and other higher-risk groups."

• On the other hand, the company had to write down nearly $500 million for vaccine inventory that has expired or is expected to expire before it can be used.

• "Despite the slowing economy and challenges in the biotech industry, Moderna is in a unique position: a platform to drive scale and speed in research of new medicines, a strong balance sheet with $18 billion of cash and an agile, mission-driven team of over 3,400 people and growing. We will continue to invest and grow as we have never been as optimistic about Moderna's future. Right now, we have four infectious disease vaccines in Phase 3 trials, and later this year, we expect important data from proof-of-concept studies in rare diseases and immuno-oncology," said Stephane Bancel, Chief Executive Officer of Moderna.

• Analysts are cautiously optimistic about Moderna stock with a price target of $216.55 and Moderate Buy consensus rating based on five Buys, six Holds, and one Sell. 

• Moderna's sales may increase in the coming quarters, especially if the covid theme returns in the autumn. In addition, vaccines against other diseases may provide additional sources of revenue and a share buyback program improves investor sentiment. Nevertheless, much will depend on the amount of people who will be willing to take booster doses as covid vaccine sales are currently a key revenue component.

Moderna (MRNA.US) stock plunged around 30.0% since January 2022, however buyers launched a recovery move in mid-June. Today stock price rose sharply following upbeat quarterly figures and broke above long-term downward trendline. Currently the price is testing 200 SMA (red line). Should break higher occur, the next target for bulls lies around $206.00 and is marked with 23.6% Fibonacci retracement of the downward wave launched in August 2021. The nearest key support can be found around $115.80, where recent lows are located. Source: xStation5