Novavax Stock Drops As JPMorgan Cuts Its Long-Term Prognosis

Novavax stock NASDAQ:NVAX

Novavax stock price today is at $22.10 as of 01:42 PM EDT on Thursday.

In pre-market trading on Thursday, Novavax stock (NASDAQ:NVAX) fell by almost 6% after JPMorgan downgraded the Maryland-based COVID-19 vaccine manufacturer from Neutral to Underweight, citing, among other things, the company’s long-term prospects.

The company’s COVID-19 vaccine Nuvaxovid, which was the first protein-based injection to win U.S. regulatory approval this year, has gloomy prospects according to an updated model as well as dire predictions from the corporation.

The recent vaccine uptake in the U.S. and EU is used by JPMorgan to forecast more cuts to the outlook amid mid- to long-term pressure on Nuvaxovid demand, even if NVAX dropped its 2022 revenue guidance in August despite weak Q2 financials.

As the company navigates an execution-focused time rather than a catalyst-driven period, the firm predicts dilution to Novavax stock over the next 6 to 12 months due to stresses in the balance sheet. With a $27 price objective for NVAX set for December 23, down from a $132 per share goal for December 22, JPMorgan anticipates that the firm would perform worse than its coverage as COVID-led sentiment decreases. After the business forecasted a delayed schedule to bring the COVID-19 vaccine candidate to market, JPMorgan lowered NVAX from Overweight to Neutral in May 2021.

Analyst View of Novavax Stock

As of 9:55 a.m. ET on Thursday, shares of the expert in recombinant protein vaccines Novavax (NVAX -13.41%) had fallen noticeably by 9.2% on high volume. As a result, the Novavax stock price this morning reached a brand-new 52-week low.

What’s keeping the shares of Novavax down right now? According to reports, J.P. Morgan analyst Eric Joseph yesterday slashed his 12-month price objective for the stock from $132 to $27 per share, citing the company’s most recent downward revision to its 2022 revenue outlook as a major justification.

Because it suggests that Novavax won’t even reach Wall Street’s most gloomy $1.25 billion revenue prediction for 2023, this sharp downward price revision is extremely intriguing. In order to make this argument clear, even in this gloomy market, biotech stocks rarely sell at below two times projected sales.

In contrast, a target share price of $27 suggests a forward-looking price-to-sales ratio of roughly 1.7 based on the lowest revenue prediction from Wall Street for 2023. Consequently, the analyst at J.P. Morgan appears to be cautioning investors that the revenue projection for 2023 by Novavax is now quite uncertain.

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