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Why Novavax Stock Is Sliding Today

By Keith Speights – Updated Oct 23, 2020 at 12:09PM

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An analyst's lower price target appears to be the main factor.

What happened

Shares of Novavax (NVAX -6.50%) were sliding 4.3% lower as of 10:09 a.m. EDT on Friday after falling as much as 7.6% earlier in the day. The decline appears to be related to B. Riley Securities analyst Mayank Mamtani's lowering of the one-year price target for the stock from $257 to $223 yesterday. Some investors could also be reacting negatively to President Trump's omission of Novavax when he referred to several leaders in the coronavirus vaccine race during the presidential debate Thursday evening.

So what

What should investors' response be to Novavax's drop today? Nothing. Whatever your view of Novavax was earlier this week, nothing has changed fundamentally for the company.

Physician holding a syringe with a needle up to a vaccine bottle

Image source: Getty Images.

B. Riley's price target for Novavax is lower, but it still represents a premium of close to 150% above the current share price. This optimistic view isn't an exception among analysts. The average one-year price target for Novavax is nearly $228, even higher than B. Riley's new target.

Granted, Mamtani now expects that the potential launch for Novavax's coronavirus vaccine, NVX-CoV2373, could be delayed by one quarter in the U.S. by the Food and Drug Administration's Emergency Use Authorization guidelines. He also thinks the vaccine's market penetration could be a little lower due to the possibility that fewer Americans will want to receive the vaccine. But neither of these issues negate the tremendous growth prospects for Novavax if NVX-CoV2373 makes it to market.

Investors also probably shouldn't read too much into President Trump's comments in the debate last night. He stated that a coronavirus vaccine could be on the way very soon and specifically mentioned vaccines being developed by Johnson & Johnson, Pfizer, and Moderna. It's understandable, though, that he wouldn't have named Novavax in the group since NVX-CoV2373 hasn't advanced to a late-stage study in the U.S. yet. 

Now what

The views of analysts and even the president don't really matter for Novavax. What does matter for the biotech stock is how well NVX-CoV2373 fares in late-stage testing. The company has already kicked off a late-stage study in the U.K. and hopes to begin a pivotal study in the U.S. soon.   


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