Good data, but the stock plunged 26% first: Moderna’s cancer vaccine gets doctors’ approval, but the market isn’t buying it
Last Thursday, late-stage data were released for Moderna and Merck’s personalized melanoma vaccine: among more than 1,100 patients, the risk of recurrence or death fell 42%, and the risk of distant metastasis fell 38%.
Analysts called the data “solid,” but the stock plunged as much as 26% intraday, its biggest one-day drop ever, briefly wiping out about $24 billion in market value.
It fell another 1.25% on Friday to $200.10, then dropped 7.3% in premarket trading Monday to $185.45, before clawing back to around $198 during the session.
The problem isn’t the data—it’s expectations: the stock is up 570% so far this year, and the market wanted the 49% from the previous small trial, not 42%.
Even more sobering is the valuation: Wall Street price targets are generally between $104 and $138. Goldman Sachs just raised its target to $137, while Redburn went straight to a Sell rating with an $81 target.
I think this is a classic “sell the news” situation: the data aren’t bad, but the 570% rally has already priced in the good news. In the short term, it’s a bubble deflation situation. Watch, don’t chase; the thesis is invalidated if it closes above $209.59 on the daily chart.
Do you think this is “good data unfairly punished,” or “it was up too much, so it deserved to fall”?
$MRNA $MRK $GS
#Moderna #U.S. stocks
The above does not constitute investment advice. DYOR; trading involves risk.
Last Thursday, late-stage data were released for Moderna and Merck’s personalized melanoma vaccine: among more than 1,100 patients, the risk of recurrence or death fell 42%, and the risk of distant metastasis fell 38%.
Analysts called the data “solid,” but the stock plunged as much as 26% intraday, its biggest one-day drop ever, briefly wiping out about $24 billion in market value.
It fell another 1.25% on Friday to $200.10, then dropped 7.3% in premarket trading Monday to $185.45, before clawing back to around $198 during the session.
The problem isn’t the data—it’s expectations: the stock is up 570% so far this year, and the market wanted the 49% from the previous small trial, not 42%.
Even more sobering is the valuation: Wall Street price targets are generally between $104 and $138. Goldman Sachs just raised its target to $137, while Redburn went straight to a Sell rating with an $81 target.
I think this is a classic “sell the news” situation: the data aren’t bad, but the 570% rally has already priced in the good news. In the short term, it’s a bubble deflation situation. Watch, don’t chase; the thesis is invalidated if it closes above $209.59 on the daily chart.
Do you think this is “good data unfairly punished,” or “it was up too much, so it deserved to fall”?
$MRNA $MRK $GS
#Moderna #U.S. stocks
The above does not constitute investment advice. DYOR; trading involves risk.
