Why Moderna Stock Is Down By 4% Today

Moderna Stock Keeps Moving Lower Despite Worries Over The Spread Of Omicron

Shares of Moderna gained additional downside momentum today after Merck‘s COVID-19 drug molnupiravir received an emergency use authorization from FDA.¬†Earlier, Moderna stock faced pressure when Pfizer‘s Paxolovid got an emergency use authorization from FDA.

The market’s logic is simple. Anti-coronavirus pills will serve as an additional tool in the fight against the pandemic. If the danger from coronavirus decreases thanks to new drugs, demand for vaccines will fall over time, which will be bearish for Moderna.

In addition, the competition in the vaccine space is intensifying. Novavax vaccine has recently recevied an emergency use listing (EUL) from the World Health Organization. EUL will allow Novavax to participate in the COVAX, which aims to distribute vaccines to less developed countries.

What’s Next For Moderna Stock?

Currently, analysts expect that Moderna will report earnings of $25.89 per share in 2021 and earnings of $26.47 per share in 2022, so the stock is trading at roughly 9 forward P/E, which is cheap for the current market environment.

However, earnings visibility remains Moderna’s key problem. While it is obvious that the company will enjoy strong demand for its vaccine for 2022, the picture for 2023 is less clear. At first glance, it looks that demand should stay strong as developed countries are already rushing to introduce boosters due to the spread of Omicron while developing countries have not completed their initial vaccination programs.

However, it is not clear whether the company will be able to deliver strong profits after the pandemic ends. These worries have already put significant pressure on Moderna stock, so news about new drugs or alternative vaccines serve as bearish catalysts for Moderna shares. It remains to be seen whether speculative traders will rush to buy Moderna stock after the recent pullback or wait for more data on Omicron to adjust their estimates.

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