Stock Analysis & Ideas

Can Novavax Rebuild Investor Confidence? Analyst Weighs In

Pandemic tailwinds have been spirited away on the wind of change. Companies which thrived as Covid-19 concerns trumped any other global developments are now feeling the effect of its waning influence.

This has been evident from the performance of ecommerce stocks, streamers and all manner of WFH names. Of course, coronavirus stocks – that segment which came into being as the pandemic took hold – are feeling the effect too.

With the pandemic now on the backfoot in many parts of the world, the demand for Covid vaccines is dropping, a fact noted by B. Riley’s Mayank Mamtani.

“The imbalance to supply & demand for these products has become particularly alarming, as already evidenced by JNJ 1Q earnings’ guidance and anticipated 1Q earnings’ commentary from AZN, BNTX/PFE, MRNA, REGN,” Mamtani explained.

But more so than any of those companies, one of the pandemic era’s biggest stars has suffered the most from the shift in sentiment.

Novavax (NVAX) shares are down 81% over the past 12 months, as the Maryland-based vaccine maker still hasn’t managed to get its Covid-19 across the finish line in the U.S. The company has yet to receive emergency use authorization (EUA) for its protein-adjuvanted shot.

However, interestingly, while investors have evidently become impatient around the slow regulatory progress, as many developed nations ready for the transition to a post-pandemic world, Mamtani thinks Novavax remains “relatively the most protected from the generally bearish investor sentiment brewing for C-19 vaccine & therapeutics’ peers.”

But that could be dependent on how the anticipated ~mid-May Q1 print turns out. To get investors back on side, Mamtani expects Novavax to “reassure investors on the near-term and long-term strength of its recently established global vaccine biz.”

By reiterating the FY22 revenue guidance of $4-5 billion, the company could take the first step in rebuilding investor confidence, with its adjuvanted protein-based platform “continuing to serve as a source of delivering diversified, multi-product portfolio for COVID, flu, malaria, and RSV.”

That said, given the demand uncertainty, Mamtani has slashed his price target from $250 to $203. No need to get too forlorn – there’s still upside of 350% from current levels. Mamtani’s rating stays a Buy. (To watch Mamtani’s track record, click here)

The Street’s average target also offers plenty of returns; at $169.4, the figure represents potential one-year upside of ~276%. Overall, the analyst consensus rates this stock a Moderate Buy, based on 5 Buys vs. 2 Holds. (See Novavax stock forecast on TipRanks)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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