What happened

As of mid-afternoon Tuesday, shares of top coronavirus stock Moderna (NASDAQ:MRNA) were tumbling by more than 7% following an analyst downgrade.

The downgrade comes on a day when rivals Pfizer (NYSE:PFE) and BioNTech (NASDAQ:BNTX), which have developed a coronavirus vaccine using similar technology, received their third approval from a national regulator.

Sick man making a phone call while wrapped in a blanket.

Image source: Getty Images.

So what

Needham & Company analyst Alan Carr changed his recommendation on Moderna to hold from buy, erasing his previous $110 price target.

He acknowledges -- how could he not? -- that the company has made "significant progress" in the viability of RNA, which is the foundational technology for its vaccines and drugs. This lineup includes mRNA-1273, the coronavirus vaccine candidate that has shown excellent efficacy in late-stage testing and is on the cusp of regulatory approval throughout the world.

However, "The stock may react favorably to EUA issuance, but we do not believe it will justify a meaningfully higher price target," Carr wrote. He was referring to the emergency use authorization likely to be granted by the U.S. Food and Drug Administration.

Now what

Unfortunately for Moderna, a competing vaccine -- Pfizer/BioNTech's BNT162b2 -- is already collecting regulatory approvals. Early on Wednesday, Health Canada authorized emergency use of BNT162b2.

But don't count the young biotech out yet; the coronavirus outbreak necessitates an "all hands on deck" inoculation situation, so there's room for more than one vaccine in the world. I don't think Moderna bulls, then, should give up on the stock on Carr's downgrade.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.