Moderna (MRNA) is a U.S.-based pharmaceutical company. I am bullish on the stock.
Just when many people thought that the COVID-19 pandemic was under control, a new variant strain emerged.
The news headlines first called it the Nu variant, but then the World Health Organization (WHO) dubbed it the Omicron variant, and that name stuck.
Cases have been detected not only in South Africa, but several other world regions, as well.
Thankfully, Moderna is diligently working to address this issue — and the company’s loyal investors are already enjoying a turnaround in the stock price. (See Analysts’ Top Stocks on TipRanks)
A Quick Look at MRNA Stock
Prior to the onset of the Omicron variant, MRNA stock was in a state of decline.
In August and September, Moderna stock hit the hard $450 resistance level not just once, but three times.
Then, the stock crashed to $350, and then to $225.
Therefore, $450 could be a good place to consider taking partial or full profits, if or when MRNA stock gets there.
There’s actually a strong chance that this will happen. Moderna stock looks like it’s in turnaround mode, having jumped above $350 on Nov. 29.
Progress Before Omicron News
Even prior to the U.S. media reporting on the emergence of the Omicron COVID-19 variant, Moderna was making headway and TipRanks was fast and accurate with the developments.
First, TipRanks contributor Priti Ramgarhia reported that Health Canada had authorized the booster dose of Moderna COVID-19 vaccine, Spikevax.
At around the same time, Swissmedic authorized the booster dose of Spikevax to people aged 12 and above.
Plus, the European Medicines Agency’s Committee for Medicinal Products for Human Use recommended the booster dose of Spikevax in the European Union for people aged 18 years and above.
Not long afterwards, Ramgarhia reported some huge news for Moderna. Specifically, the U.S. Food and Drug Administration (FDA) extended the emergency use authorization (EUA) of a booster dose of Moderna’s COVID-19 vaccine to all adults aged 18 and older.
Just these developments, by themselves, should have been sufficient to driver a major rally in MRNA stock.
Yet, it would take another event — an unfortunate one — to propel Moderna stock higher.
Years of Future Revenues
During the announcement of the Omicron variant on Black Friday, many stocks declined sharply in value.
Yet, MRNA stock surged higher as investors understood that the community would rely on Moderna and a handful of other pharmaceutical companies to develop vaccines for the Omicron variant.
On Nov. 29, the market received confirmation that Moderna was, indeed, preparing to deliver those vaccines.
I’m glad to report (with credit to Bloomberg) that, according to Moderna, a new vaccine to fight the Omicron COVID-19 strain could be ready by early 2022 if required.
Piper Sandler analyst Edward A. Tenthoff asserted that Moderna’s mRNA technology is ideally suited to adapting vaccines to new variants.
With that undoubtedly in mind, Tenthoff has assigned an overweight rating on MRNA stock.
As Tenthoff explains, the bad news may turn out to be good news for Moderna, financially speaking.
“SARS-CoV-2 is not going away and will provide years of future revenues,” Tenthoff wrote in a note to clients.
Wall Street’s Take
According to TipRanks’ analyst rating consensus, MRNA is a Hold, based on six Buy, four Hold, and three Sell ratings. The average Moderna price target is $298.17, implying 16.3% downside potential.
The Takeaway
It’s encouraging to know that Moderna is working quickly to address this newly discovered COVID-19 variant strain.
Investors have reacted by bidding up the MRNA share price.
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