The Moderna share price has risen +400%: should I buy the stock now?

With the continued vaccine rollout leading to a positive Q1, Charlie Keough assesses whether he sees long-term value in the current Moderna share price.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Since the outbreak of the pandemic last March, Moderna (NASDAQ: MRNA) has risen around 430%, mainly due to the vaccine rollout. Although there was a spike after its initial vaccine announcement, the Moderna share price has been rather volatile since. With it currently sat at $160, here I am going to look at whether now I deem a good time to add Moderna to my portfolio.

A solid 2021

The rest of 2021 looks set to mark a good period for Moderna. With Q1 revenues recently announced at $1.9bn, this is substantially more than the $571m revenue of Q4 last year. Moderna recently stated it intends to supply 800 million doses of Covid-19 vaccines in 2021 and three billion in 2022 – a factor that is likely to continue to boost revenue. This places my confidence for the future Moderna share price in good stead, as the large demand is likely to continue.

Moderna also recently announced it had signed advance purchase agreements for $19.2bn, all for Covid-19 vaccines, set to be delivered this year.

Many analysts also seem to remain positive about the Moderna share price for the future, regardless of the intellectual property (IP) rights scare (explained below). Goldman Sachs raised its target price on the biotech stock to $228, up from $206. Barclays also raised its target to $194 from an original $178.

Not all good news

However, I cannot see the long term providing opportunities for a rise in the Moderna share price.

Firstly, although the rest of 2021 and potentially 2022 provides optimism for Moderna, after this I can see the Covid-19 vaccine market falling off. I suspect by the end of 2022 that a large proportion of populations would have been vaccinated. As a result of this, I predict demand to drop – and therefore more than likely a fall in the Moderna share price.

Another negative is the recent announcement by the Biden administration coming out in support for the suspension of Covid-19 vaccine IP rights. This could allow lesser-developed countries to create vaccines locally, potentially affecting the revenue of Moderna. Countries such as India, with its current huge infection problem, could opt for cheaper ways to inoculate its large population.

Post-Covid-19 potential?

Although many analysts remain positive about the future Moderna share price, I do not share the same levels of optimism.

I see the IP rights narrative, supported by the World Trade Organization, potentially posing a real problem for Moderna should it go ahead. Prior to the pandemic, the Moderna share price hovered between $18-$25. With it currently sat well over $150, should the vaccine rollout come to an end within the next few years, what is to stop the share price from falling back down to these levels?

From a short-term perspective, I see potential in the Moderna share price for the rest of 2021 and possibly 2022. However, I tend to view stocks with a long-term outlook. As such, I am opting against buying Moderna any time soon.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

More on Investing Articles

Investing Articles

My 3 favourite FTSE dividend stocks give me a mind-blowing 9.82% yield!

Harvey Jones is surprised to learn that he owns the three highest-yielding dividend stocks on the FTSE 100. So is…

Read more »

Investing Articles

Following strong 2024 results, this 6.1%-yielding FTSE 100 gem looks a bargain to me

With good 2024 results delivered, and a buyback and dividend increase announced, this high-yielding FTSE 100 heavyweight looks very cheap…

Read more »

Investing Articles

I’m not surprised the IAG share price is surging, it’s the top-rated UK stock

The IAG share price is up 57% since the start of the year, but remains undervalued. This bull run could…

Read more »

Investing Articles

Is the stock market set for a crash in 2025?

Could antitrust lawsuits derail US tech stocks and cause a stock market crash next year? Stephen Wright thinks the risks…

Read more »

Investing Articles

As Rolls-Royce’s share price falls 8%, is it time for me to buy on the dip?

Rolls-Royce’s share price has dropped after a stellar rise this year. I think this leaves it looking even more discounted…

Read more »

Engineer Project Manager Talks With Scientist working on Computer
Investing Articles

I reckon this S&P 500 stock could be among the best shares for me to buy today

This S&P 500 monopoly stock's trading at a 30% discount to its historical valuation just as growth could be about…

Read more »

Investing Articles

A ridiculously cheap FTSE 250 stock to buy today?

The FTSE 250's rising by double-digits, but this stock's seemingly falling behind despite higher cash flows and dividends. At a…

Read more »

Investing Articles

The FTSE 100’s trading near a 52-week high! I’m still looking to buy

The FTSE 100's slowly making its way towards record highs, but there are still dirt cheap buying opportunities to discover…

Read more »