Shares of Moderna (NASDAQ:MRNA) fell 6.9% on Wednesday, following a cautionary note from analysts at a respected investment bank.
Morgan Stanley analyst Matthew Harrison cut his rating on Moderna's stock from overweight to equal weight, though he raised his price forecast from $100 to $150. Harrison sees more long-term upside ahead, but he cautioned that investors' near-term expectations may be too high.
Thus, he believes the best move is to wait for opportunities to buy the stock at a lower price. "We think it's appropriate to step to the sidelines for now and look for entry points to better realize the potential long-term value," Harrison said.
His downgrade essentially comes down to valuation. Moderna's stock price is up a staggering 609% in 2020. Investors have bid up its shares following the promising performance of its coronavirus vaccine candidate, mRNA-1273, which has shown to be as much as 94.1% effective against COVID-19 in clinical trials. Harrison is basically arguing that Moderna's share price has overshot the biotech's current value, but he concedes that its long-term future remains bright.