Moderna Q3 preview: Where next for the Moderna share price?

Moderna’s Covid-19 vaccine has transformed its finances over the past year but markets remain cautious about demand in 2022 and beyond. We explain what to expect from the earnings and consider how Moderna shares could react.

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When will Moderna release Q3 earnings?

Moderna is scheduled to publish third quarter earnings on Thursday November 4.


Moderna Q3 earnings preview: what to expect from the results

Moderna is a prime example of what one breakthrough discovery can have. The company was largely unknown to the majority of people at the start of 2020 but was thrusted into the spotlight when it became one of the first companies to develop a successful Covid-19 vaccine. Having become one of the most popular jabs on the market, Moderna has exploded from a $6 billion company to one that is worth almost $140 billion today.

The impact of its vaccine has transformed Moderna’s finances. Wall Street forecasts revenue will jump to $6.20 billion in the third quarter compared to just $157.9 million last year. It would also mark a significant acceleration from the $4.35 billion in sales booked in the second quarter.

Analysts expect Moderna to report net income of $3.87 billion and turn from a $233.6 million loss, with diluted EPS forecast to come in at $9.05 compared to a $0.59 loss the year before.

All the attention this week will be on Covid-19 vaccine sales going forward. Although Moderna has a sprawling business with a number of other drugs in development, the vaccine will remain the driver of sales and earnings for the immediate future.

Moderna said it was aiming to produce 800 million to 1 billion doses of its Covid-19 vaccine in 2021 and generate $20 billion of sales when it released its last set of results. It has signed further deals for more doses to be delivered in 2021 but most of the new orders coming in are now for 2022 or even 2023. Analysts are split on how Moderna will perform this year, with consensus sales numbers ranging from $17 billion to $22 billion this year.

This places much of the focus this week onto the outlook for vaccine sales over the coming years. Moderna has said it is aiming to boost capacity to produce 2 billion to 3 billion doses in 2022 and has already locked-in $12 billion of sales, with options signed for up to another $8 billion of sales. The company is still negotiating contracts for 2022 and has signed a number of deals since its last set of results. This includes 20 million extra doses to Canada, another 20 million to Peru, 95 million to the African Union, and hundreds of millions to the COVAX facility. Those deals also included doses that will be shipped in 2023 and some are even stretching into 2024 already.

This should lead to an improved outlook for 2022 being revealed this week, although analysts have mixed estimates. Current consensus numbers suggest vaccine sales in 2022 could range from as low as $13 billion to as high as $37 billion, according to data from Bloomberg. For 2023, estimates range from just $4 billion to $23 billion.

Orders are continuing to come in, but the value of sales is debated. It is still unclear what approach developed nations will take to booster shots while the value of sales remains uncertain as more shift from richer developed nations to more low-to-middle income nations. For example, Moderna has differently priced tiers for its jab and sales to the likes of the COVAX programme have been made on its cheapest one.

The primary job will be to cement expectations for the remainder of 2021 and to build confidence behind sales prospects for 2022 and, to a lesser degree, 2023 and beyond. Some analysts think 2021 guidance could be raised this week.

Markets will also be eagerly looking out for news on how the vaccine is performing against variants and on how it plans to tackle any vaccine-proof variants that emerge going forward. Investors will also want to see commentary on getting the jab approved in teenagers and adolescents after shares dropped this week after the US Food & Drug Administration delayed its decision on whether to approve it for use on teenagers, stating it would not be made before the end of 2021 as it needs time to evaluate concerns over a rare heart inflammation raised by international studies. That has been regarded as a major blow considering Pfizer’s vaccine has already been given the green light to be used on children as young as 12 back in May.

Notably, Pfizer released its own third quarter update on Tuesday that sent shares higher. Revenue and earnings both came in ahead of expectations and Pfizer once again raised its outlook for the full year, stating it plans to book $36 billion in vaccine sales in 2021 (up from its previous target of $33.5 billion) and has raised the midpoint of EPS expectations.


Where next for the Moderna share price?

Moderna shares have soared from $19 in the middle of February 2020 to over $343 today, which has been solely down to the success of its Covid-19 vaccine. However, the stock has slipped over 23% from the all-time high of $449.38 seen in September as investors started turning to more attractive opportunities as the pandemic eases.

Brokers currently have a Hold rating on the stock and believe Moderna is adequately valued. The average target price of $333.77 implies Moderna is 2.3% overvalued at present.


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