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Moderna Slides as Bank of America Cuts to Underperform on Valuation

Moderna shares are 'attaining levels that are increasingly difficult to justify,' a Bank of America analyst says, cutting the stock rating to underperform.

Moderna  (MRNA)  was sliding Monday after a Bank of America analyst downgraded the biotech, a prominent vaccine producer, to underperform from neutral with a $150 price target, saying the company's valuation was stretched.

Shares of the Cambridge, Mass., company at last check were down nearly 10% to $156.34.

Analyst Geoff Meacham said in a note to investors that Moderna's shares quintupled  (up 425%) in 2020 and are up 66% year-to-date, adding that they are "attaining levels that are increasingly difficult to justify on a fundamental basis."

"Indeed," he said, "the momentum has continued despite new covid-19 vaccine data from Novavax  (NVAX)  and Johnson & Johnson's  (JNJ)  phase 3 study approval."

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Meacham said that Moderna and Pfizer have best-in-class vaccine efficacy thus far, "but volumes and lower price points from Novavax, JNJ, Astra-Zeneca  (AZN)  and others should affect cumulative sales expectations from Moderna.

"Although we acknowledge that vaccines are clearly the most promising solution for the covid-19 epidemic, and a potential incremental revenue driver exists in addressing new variants," Meacham said, "the number of vaccine options with compelling characteristics (single injection, lower cost, clean safety) could begin to weigh on Moderna's margins and market share longer-term."

Modern's covid-19 vaccine received emergency-use authorization from the U.S. Food and Drug Administration on Dec. 18, and the company started supplying the federal government shortly thereafter.

Last week, Moderna reported that it was on track to deliver on its commitment of about 100 million doses to the U.S. government by the end of the first quarter.

CNBC reported last week that Moderna asked the FDA to allow it to include 15 doses in each vial of its covid-19 vaccine, up from 10 doses