$Novavax(NVAX)$ shares were among the notable decliners with -25% on Tuesday after J.P. Morgan downgraded the COVID-19 vaccine maker to a sell-equivalent rating of underweight, arguing that the stock’s recent rally doesn’t justify its valuation.
J.P. Morgan analyst Eric Joseph pointed out that $Novavax(NVAX)$ has significantly outperformed (adding more than 250% compared to a 12% gain in the broader biotech space) since the company partnered with $Sanofi SA(SNY)$ for its protein-based COVID shot, named Nuvaxovid, in May.
The deal led J.P. Morgan to upgrade the stock at the time, as the company received $500M from the French drugmaker as part of the partnership that tied up Nuvaxovid with $Sanofi SA(SNY)$ flu franchise.
“Having further reviewed the implications from the agreement and the outlook for the COVID-19 and flu vaccine demand, we believe current levels substantially overvalue the potential Nuvaxovid economics / revenue to the company,” Joseph wrote.
The analyst expects the partnership to generate $4 per share for $Novavax(NVAX)$ thanks to peak sales for Nuvaxovid and COVID-flu combo vaccine candidates.
However, with a $6 per share cash projection for the company for 2025 year-end, “but little in the way of a foreseeably value-accretive proprietary pipeline, we are returning to an underweight rating of NVAX shares,” Joseph wrote, with an $8 price target on the stock.
Comments
JPM analyst nut case! Be long and make money. Look at his statement ! NVAX will progressively achieve $4-6 EPS in the next 18 months, and its market value is just $1B?
JPM mistakenly thinks that declining Covid vaccinations and Pfizer deemphasizing is net negative for NVAX. It’s not. It’s a huge win.
jp morgan will pound nvax into nothing. jp morgan is 5 trillion bank. they are doing it openly. no amount of buyers can even make a dent.
This company can’t be beat on science/technology hence these silly business/regulatory games.
JPM is taking this to 8.