Original title: Here comes the one that spills cold water! Bank of America: Moderna's market capitalization of nearly 200 billion US dollars is ridiculous, and the stock price may have plummeted 76%
Source: FX168
The global fight against the epidemic has been going on for more than a year. With the introduction of vaccines and the promotion of vaccinations, confidence in economic recovery has increased. Vaccine manufacturers have “contributed greatly”. What the market has given back to them is soaring stock prices, but some investment banks have raised questions, believing that high market capitalization is not in line with fundamentals, warning that future stock prices are fearful.
Bank of America(Bank of America) said in a report on Tuesday that Moderna's increase so far this year was more than 360%, but there is a possibility of a sharp decline because the company's market capitalization of nearly $200 billion is “unreasonable from a fundamental point of view.”
The bank reiterated its target price of $115, which may be 76% lower than Monday's closing price.
In the US stock market on Monday, Modena's stock price reached a record high. At one point, it soared 19%. The closing increase fell back to 17%, closing at 484 US dollars, and the market capitalization surged to 195.5 billion US dollars, surpassing the established pharmaceutical giant Merck (Merck), which has a history of 130 years.
According to the report, for Moderna, it is necessary to prove that it surpasses Merck (Merck) and Bristol-MyersSquibbThe value of pharmaceutical giants with more than 100 years of history, such as (Bristol-Myers), still has a lot to be done.
“To justify the value of $200 billion, we must assume: 1) from 2022 to 2038, there will be 1 billion to 1.5 billion doses of COVID-19 vaccine (produced) each year; 2) the success rate of the entire product line is 100%, and total sales have peaked at $30 billion.”
While Bank of America is positive about the mRNA technology Moderna is using to develop its therapeutics, it believes the above hypothesis is “impossible to hold.”
Moderna's stock price has soared as investors increasingly believe that market demand for its COVID-19 vaccine will remain strong for years to come, and that demand is already reflected in its earnings reports.
Last Thursday, Modena released its second-quarter earnings report. Second-quarter revenue increased 6516% to more than 7 billion US dollars.
But Bank of America's discussions with infectious disease experts suggest there is reason to be skeptical about the long-term demand for COVID-19 vaccines. Bank of America highlighted 5 reasons why long-term demand for COVID-19 vaccines may weaken:
1. Breakthrough infections are rare, and even if they do occur, the vast majority are mild/moderate symptoms.
2. The current COVID-19 vaccine still provides strong anti-infection protection, but it will also have serious consequences. If it fails, it will be the main basis for pushing for the blockade.
3. Regular exposure to the new mutated virus may enhance immune protection.
4. With the exception of a limited number of immunocompromised people, the promotion of routine boosters is not entirely reasonable.
5. There is growing evidence that the new mutated virus is not becoming more pathogenic.
Moderna isn't the only stock that has seen a sharp rise due to the success of the COVID-19 vaccine. Since this year, another vaccine manufacturer, BioNTech's stock price has risen 415%, and its current market capitalization exceeds 110 billion US dollars.