By Senad Karaahmetovic
Bank of America analyst Alec Stranahan initiated research coverage on Novavax (NASDAQ:NVAX) with an Underperform rating and a $35.00 per share price target, signaling a downside risk of 40% based on yesterday’s closing price of $58.43.
Novavax stock price is down over 60% YTD, fueled by tempered expectations in COVID-19 and seasonal flu, as well as tightening financial conditions. Despite such a big drop in NVAX shares, the analyst sees “room for shares to trade lower still.”
His stance is based on “our longer-term Nuvaxovid expectations [that are] meaningfully below consensus (~$1.2B in 2024+; -$800M consensus) given our bearish view on continued C-19 booster use, unclear benefit as a heterologous option, and waning immunity against new variants (i.e., Omicron). Resolution on approvability in flu, RSV, and malaria are also still open questions, with these markets becoming increasingly crowded and emerging competitor data looking strong relative to what Novavax has shown,” Stranahan told clients.
The analyst added that he could be wrong in case of a greater initial uptake in the US and the rest of the world when it comes to C-19 sales, or sustained long-term use. Moreover, the full approval of NanoFlu could “add another $15 to our PO.”
Novavax stock price is down 5.6% today.