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Moderna to Replace Alexion in S&P 500

Pharmaceutical behemoth Moderna (MRNA) announced on Thursday that it is set to join the S&P 500 from July 21. The company will replace Alexion Pharmaceuticals, which will soon be acquired by AstraZeneca.

The news prompted the shares of Moderna to surge as much as 6% in early trading on Friday. Moreover, the company hit a market value of $110 billion.

Shares of the company have surged about 150% year-to-date. The rise can be attributed to its unfaltering focus on flattening the COVID-19 curve and aggressive steps to develop effective COVID-19 vaccines and boosters. Moreover, Moderna is also developing several promising candidates as medication for oncology and other rare diseases. (See Moderna stock charts on TipRanks)

Following the news, Jefferies analyst Michael Yee reiterated a Hold rating on Moderna and increased the price target to $250 from $170, implying a 9% downside potential to current levels.

Yee expects Moderna to marginally surpass second-quarter estimates and increase its full-year 2021 revenue guidance to $21.2 billion from $19.2 billion. He also expects Moderna to make positive announcements about upcoming boosters, but he feels that significant pipeline value has already been priced in.

Consensus among analysts is a Moderate Buy based on 7 Buys, 4 Holds, and 2 Sells. The average Moderna price target of $200.09 implies 29% downside potential to current levels.

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