Introduction
Moderna Inc. (MRNA) is facing a challenging period as its stock continues to slide, driven by recent corporate decisions and analyst downgrades. The company’s announcement to significantly reduce its research and development (R&D) budget and a negative assessment from JPMorgan have exacerbated the decline.
Moderna’s Recent Stock Performance
Shares of Moderna have fallen for the second consecutive day, reflecting growing investor concerns. On Thursday, Moderna’s stock experienced a notable 12% drop, closing around $70. The downward trend continued into Friday, with the stock off about 3% more. This decline comes as Moderna has been struggling throughout the year, with its shares down approximately 30% year-to-date.
R&D Budget Cuts
Moderna recently revealed plans to cut its R&D spending by $1.1 billion by 2027. This decision reflects a strategic shift but has raised alarms among investors about the company’s future growth prospects. The reduction in R&D expenditure is expected to impact the company’s ability to advance its pipeline of therapies and vaccines, including its personalized neoantigen therapy (INT) for cancer.
Analyst Downgrade
Adding to the pressure, JPMorgan has downgraded Moderna’s stock rating from neutral to underweight. The bank has set a new price target of $70, significantly lower than its previous target of $88 and well below Wall Street’s consensus price of around $100, according to Visible Alpha. JPMorgan’s analysts expressed skepticism about Moderna’s future performance, noting that the likelihood of accelerated approval for its INT therapy is diminishing and that the company’s quarterly results may not consistently exceed expectations.
Financial Outlook and Projections
In addition to these setbacks, Moderna has provided a cautious financial outlook. The company has projected fiscal 2025 revenue between $2.5 billion and $3.5 billion, falling short of analyst expectations of $2.9 billion. Moderna anticipates breaking even on an operating cash cost basis with a projected $6 billion in revenue by 2028, contingent on the approval and commercialization of new products.
Conclusion
Moderna’s stock decline highlights the broader challenges facing the company as it navigates significant strategic changes and responds to shifting market expectations. The cut in R&D spending and recent analyst downgrades underscore investor concerns about Moderna’s growth trajectory and its ability to deliver on its ambitious goals. As Moderna works to stabilize its financial outlook and advance its product pipeline, it will need to address these challenges to restore investor confidence and enhance its market position.
I am Aparna Sahu
Investment Specialist and Financial Writer
With 2 years of experience in the financial sector, Aparna brings a wealth of knowledge and insight to Investor Welcome. As an accomplished author and investment specialist, Aparna has a passion for demystifying complex financial concepts and empowering investors with actionable strategies. She has been featured in relevant publications, if any, and is dedicated to providing clear, evidence-based analysis that helps clients make informed investment decisions. Aparna Sahu holds a relevant degree or certification and is committed to staying ahead of market trends to deliver the most up-to-date advice.
