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Why Novavax Stock Sank Again on Tuesday

By Eric Volkman - May 11, 2021 at 5:51PM

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An analyst's price target cut reflected an uncomfortable new reality for the biotech.

What happened

It's only Tuesday, but Novavax (NVAX 2.80%) is already having an ugly week. After its stock sank on Monday despite a not-bad first-quarter earnings report, on Tuesday, it was hit by an analyst's price target cut and the shares plummeted again, closing the session almost 14% lower.

So what

In his new research note, Jefferies (JEF 1.87%) prognosticator Kelechi Chikere sliced his price target on Novavax stock from $310 to $235. Since the new target figure is still 70% above the most recent closing share price, Chikere is maintaining his buy recommendation.

Gloved hand filling a syringe from a vial.

Image source: Getty Images.

But his note highlights some concerning facts nestled within the company's Q1 earnings report.

The clinical-stage biotech admitted that production of its coronavirus vaccine, NVX-CoV2373, will increase more slowly than previously anticipated. Additionally, Novavax plans to wait until Q3 to file for the vaccine's authorization in the U.S. and in Europe. Understating the case somewhat, Chikere described the delays as "clearly disappointing."

Novavax's news was particularly dispiriting given that the vaccine (which has tested very well in clinical trials) is likely to win authorization in at least one major jurisdiction.

Now what

Novavax is already quite some distance behind the leaders in the coronavirus vaccine race. Pfizer and BioNTech, Moderna, and Johnson & Johnson have all gotten emergency use authorizations for their jabs in this country and elsewhere. And it doesn't seem like there will be many prizes for those that cross the finish line far back in the pack.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Jefferies Financial Group Inc. The Motley Fool recommends Johnson & Johnson and Moderna Inc. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Novavax, Inc. Stock Quote
Novavax, Inc.
NVAX
$41.47 (2.80%) $1.13
Pfizer Inc. Stock Quote
Pfizer Inc.
PFE
$50.11 (3.77%) $1.82
Johnson & Johnson Stock Quote
Johnson & Johnson
JNJ
$165.30 (-1.10%) $-1.84
Jefferies Financial Group Inc. Stock Quote
Jefferies Financial Group Inc.
JEF
$34.86 (1.87%) $0.64
Moderna, Inc. Stock Quote
Moderna, Inc.
MRNA
$171.18 (-0.37%) $0.63
BioNTech SE Stock Quote
BioNTech SE
BNTX
$160.35 (1.11%) $1.76

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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