By Sam Boughedda
Moderna (NASDAQ:MRNA) was cut to Underperform from Market Perform by SVB Securities analysts on Friday.
They also lowered the firm's price target on the stock to $93 from $111 following Thursday's reported FY22 results and updated 2023 guidance which "gave a deeper look into long-term margins as the pandemic revenue boom comes to an end."
"COGS expanding at least 2000 bps for 2023 vs 2021 pandemic margins and OpEx of $6.0B vs $4.4B/$2.6B in 2021/22 paint a picture of margin erosion unseen in the sector since the collapse of the HCV market," explained analysts.
They add: "Like concerns about operating leverage, MRNA's IP challenges were relegated to the future during the vaccine boom amid excitement about potentially robust pricing power—a shift that drove our upgrade last year. With disclosed royalties on COVID-19 vaccine net sales to the NIH, we see potential additional royalties to ABUS (Not Rated) and ALNY (MP) as further downside risk, depending on litigation outcomes."
As a result, the analysts believe that the changes point to an extended period of underperformance as "the operating leverage that made MRNA one of the greatest pandemic beneficiaries reverses."
Moderna shares have declined over 4% Friday.