Biotech can't generate the revenue that investors expect, says Wall Street firm
Moderna was the target of a sell recommendation by Citi.
After rallying almost seven-fold this year, Citi is now advising clients it's time to get out of Moderna. Its healthcare team, led by global head Geoff Meacham, has downgraded the pioneering biotech play to sell from hold as it struggles to justify the valuations and assesses that some of the more optimistic sales assumptions are unrealistic.
While Citi has significantly increased the target price from $60 to $80 by refining its sales and operational expense assumptions, this still falls a long way short of the closing price of $203.46 in New York on Tuesday.
Shares in the biotech pioneer had been performing well in 2026 with the stock motoring along from the low $30s to the mid $50s by July before the company announced a significant pivot in its strategic pipeline. Moderna (MRNA) became only the third stock this millennium to double in a day after disclosing successful trials of its personalized cancer vaccine, exploiting its messenger ribonucleic acid, or mRNA, technology to treat oncology, rare diseases and auto-immune disorders.
Between Aug. 18 and Sept. 25, Moderna stock vaulted from $62 to a post-pandemic, intraday high of $208. In that time both the State Street SPDR S&P Biotech exchange-traded fund XBI and the S&P 500 SPX benchmark have actually fallen slightly.
Even implying a 100% probability of success to Moderna's intismeran cancer vaccine programs, Meacham and team are only able to justify a $100 price target, roughly half of the pre-market trading level of $193 on Thursday. To come up with a price target near current prices, Citi estimate Moderna would need to generate $26 billion in annual oncology sales (only half of which accrue to Moderna itself), and that's seven times bigger than what Meacham's team models.
Citi compares Moderna to peer Regeneron $(REGN)$ and finds its market capitalization roughly similar ($80 billion versus $77 billion) despite a massive disparity in revenues and net income.
-Jules Rimmer