What happened

Shares of Moderna (MRNA -3.36%), BioNTech (BNTX -2.45%), and Novavax (NVAX -1.89%) fell 4%, 9%, and 11%, respectively, on Monday, as investors rotated out of the previously high-flying vaccine stocks.

So what

Investors seeking the means to protect and grow their wealth during the pandemic have sought shelter and opportunity in the shares of the major vaccine makers. Moderna, BioNTech, and Novavax, in turn, have delivered torrid gains to their shareholders in recent months. Even after today's declines, their stock prices are up 105%, 254%, and 318%, respectively, so far in 2021. 

A downwardly sloping stock chart.

Multiple vaccine stocks pulled back sharply on Monday. Image source: Getty Images.

Yet after their steep rise, analysts have cautioned in recent days that these vaccine stocks might have soared to levels that are unjustified by their earnings prospects. For one, Bank of America analyst Geoff Meacham argued last week that Moderna's market valuation was "ridiculous" even when using optimistic sales forecasts for its COVID-19 vaccine and entire pipeline of experiential drugs. For this reason, Meacham warned that the stock could fall all the way to $115 per share, or roughly 69% from Moderna's current price near $374. 

And on Friday, SVB Leerlink analyst Daina Graybosch assigned a $293 price target for BioNTech's shares. That's 15% below the stock's current price near $343. "We don't foresee the extended durability in the BNT162b2 [BioNTech's COVID-19 vaccine] revenue stream that could support upside to the current market valuation," Graybosch said. 

Now what 

Although much of Moderna, BioNTech, and Novavax's early gains were justified by the success of their vaccine-development efforts, it appears that their stocks may have been propelled to unreasonably lofty heights by momentum-focused traders. Momentum, however, cuts both ways. And with these vaccine stocks selling off sharply in recent days, it's possible that further declines could lie ahead.