has a new bear. JPMorgan downgraded its stock rating from neutral to underweight, citing concerns about long-term performance amid poor demand for the company’s Covid-19 vaccine.
Analyst Eric Joseph also lowered his price target
(ticker: NVAX) shares to $27 from $132.
The company has had a difficult year. Shares of Novavax, which start trading on Thursday, have shrunk 82% so far in 2022. The company cut its annual sales guidance in August and posted a disappointing second quarter. Then, earlier this week, Novavax stock, along with that of Covid-19 vaccine developers
(PFE), slipped after President Joe Biden said the “pandemic is over” during an interview with 60 minutes.
Novavax shares are down 9% to $23.48 Thursday morning.
“Despite weak pressure in the second quarter and the downward revision of revenue expectations for , our reading of recent vaccine dynamics in the EU and US would suggest that further budget cuts in guidance are on the horizon, while also pointing to medium- and longer-term headwinds for meaningful Nuvaxovid uptake,” Joseph wrote in a research note. Nuvaxovid is Novavax’s Covid-19 vaccine.
From September 22the seven-day average for daily reported coronavirus cases was about 59,000, about a quarter of where they stood in July, as reported in The Wall Street Journal.
Joseph wrote that the long-term demand trend for Covid-19 vaccines is hard to say, but “innovating to dampen the impact of new variant spots will be key to building or maintaining market share – an aspect where Novavax, though potentially able, has struggled to keep up. Without this, we see little leverage for Nuvaxovid to penetrate more than 5% of the share.”
The analyst added that “by seeing relatively challenging fundamentals as broader Covid-19 trading sentiment fades further into the background, we see Novavax performing under our broader coverage.”
Write to Angela Palumbo at: [email protected]