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Moderna Boosted by Delta Variant
Stock Analysis & Ideas

Moderna Boosted by Delta Variant

Once the COVID-19 pandemic became a reality, several firms began racing to produce the most rapid and effective vaccine. Beyond helping pull the world out of economic ruin from repeated lockdowns, the potential for profit was extraordinary. As the world once again faces the virus in the form of the new Delta variant, Moderna, Inc. (MRNA) has seen significant share price growth, even given its recent two-day pullback. (See Moderna stock charts on TipRanks)  

Providing his thesis on the developing situation is Michael Yee of the Jefferies Group, who wrote that the stock has begun to trade more like a speculative tech company, rather than a healthcare or pharmaceutical company. Investors have been looking into which applications Moderna’s MRNA technology could be used for in the future, making it almost like a “disruption technology play,” similar to Tesla’s (TSLA) story. Yee also attributes the stock’s massive rise over the last few weeks to its inclusion into the S&P.  

Yee assigned a Hold rating on the stock, and declared a price target of $425. This target suggests a possible 12-month upside of 10.30%, although at his time of publishing, the stock was higher than his prediction. It is important to note that the stock fell on Wednesday by $71.43, or 15.64%.  

The four-star analyst expects several key developments to unfold over the second half of 2021, namely the FDA recommending booster shots for at least 30% of those who are already vaccinated. He derives this opinion from data which shows antibody efficacy to diminish after about six to eight months, particularly when faced with the Delta variant. Furthermore, Delta has already brought both Moderna and Pfizer (PFE) vaccine efficacy significantly down to more modest protection levels.  

Approval from the Food and Drug Administration (FDA) is expected for Moderna’s boosters, and Yee foresees pressure weighing on the organization. Due to the pressure, says Yee, the FDA will push for boosting the majority of the population, and not just the at-risk.  

Most of those vaccinated in the U.S. received their vaccines in the first and second quarters of FY21, and thus Yee expects symptomatic infections to pick up as the year moves closer to the winter.  

Unfortunately, the world is falling into the hands of the virus yet again. However, for Moderna, this is less-than-negative news, as the company is forecasted to continue profiting.  

On TipRanks, MRNA has an analyst rating consensus of Hold, based on 5 Buy, 5 Hold, and 2 Sell ratings. The average Moderna price target is $273.89, representing a potential 12-month downside of –28.92%. MRNA closed trading Wednesday at a price of $385.33.  

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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