Moderna's Lot Recall Today Is a Blot Despite Recent Good News

Mark Hake

Moderna (MRNA) reported today (April 8) the second recall of its Covid-19 vaccine due to contamination. Reuters reported that Moderna recalled 764,900 doses of its COVID-19 vaccine made by its contract manufacturer Rovi, based in Spain. That could hurt MRNA stock going forward, despite some other recent good news.

The problem is this is the second time within a year that this contamination has occurred. This time a vial was found contaminated by a foreign body. It did not disclose what was found in the vial. Even though this was one vial, the lots for this vial were distributed in January throughout Norway, Poland, Portugal, Spain, and Sweden.

Moderna previously recalled doses previously distributed in Japan after authorities stopped the use of some of the does. It had to recall three batches of COVID-19 vaccine after an investigation found stainless steel contaminants in some vials.

That puts a blot on a company that has successfully distributed over 900 million doses of its Covid-19 vaccine worldwide. And recently on March 29, Moderna received FDA emergency use approval (EUA) for a second booster dose of its vaccine. That news along with the company's huge revenue and earnings prospects this year of over $22 billion should have pushed the stock higher.

MRNA stock is drifting lower. Year-to-date it's down 36.7% as of Friday, April 8, at $160.84, from $253.98 as of the end of 2021. Moreover, analysts forecast that 2023 revenue could drop significantly to just $10 billion from $22 billion this year.

That raises its forward price-to-earnings multiple from just under 6 times this year to about 16x next year. Investors may be concerned that a decline in Covid-19 cases going forward could hurt its earnings. That shows that its valuation at $60 billion could be vulnerable.

Moreover, contaminated vials also don't hurt the prospects for MRNA stock and its perceived safety in consumers' minds.

****************

By the way, don't forget to fully "Follow" me and make sure to download the Newsbreak app to become a Registered Follower. This way you can also see all my articles in the past. Click on the link underneath my profile name.

This is not financial advice and you should not rely on my analysis to buy or sell any stock. I am not undertaking to induce you to buy or sell any securities.

I am relying on the “publisher’s exclusion” in the Investment Advisers Act of 1940 to provide this information without any personalized or individualized investment advice.

Mark Hake writes articles on InvestorPlace.com, Barchart.com, Medium.com, and Newsbreak.com on stocks and cryptos.

Comments / 8

Published by

Mark Hake is a financial analyst, investor, and Chartered Financial Analyst (CFA). He writes about US and foreign stocks as well as cryptos, hedge funds, and private equity. He previously ran his own hedge fund, investment research firm, and acted as CFO for a fintech startup. He focuses on finding value, arbitrage, and hidden asset opportunities.

Phoenix, AZ
16K followers

More from Mark Hake

Comments / 0