Moderna (MRNA) beat COVID-19 vaccine sales expectations in Q3, with management confident in meeting full-year 2025 guidance despite lower vaccination rates, UBS said in a note Monday.

Operational efficiencies helped costs come in well below estimates, positioning Moderna to exceed its 2025 cost reduction targets by around $1 billion on a GAAP basis, the firm said.

UBS sees Moderna's oncology franchise as an undervalued growth driver, citing key data readouts in 2026 for its melanoma and renal cell carcinoma vaccines.

Risks outlined by UBS include lower vaccine uptake for COVID-19, competition, and clinical pipeline setbacks, as well as possible regulatory changes.

UBS maintained the company's buy rating and $40 price target.

Shares of Moderna rose over 4% in recent Tuesday trading.

Price: 25.94, Change: +1.18, Percent Change: +4.75