FBR Chimes in on Novavax, Inc. (NVAX) Following Analyst Day


In a research report released Friday, FBR Capital analyst Vernon Bernardino reiterated an Outperform rating on shares of Novavax, Inc. (NASDAQ:NVAX), with a price target of $12, after the vaccine maker hosted an analyst day to review third-quarter operations and provide an update on its clinical development plans.

Bernardino noted, “We think data, conclusions, and rationale presented were compelling, particularly including a thorough understanding of lessons learned from RESOLVE that defined what additional information is required and how to obtain it. We believe the 84% pullback since the announcement represents a disconnect with identification of this forward path and, therefore, a strong buying opportunity.”

“The plan, in 2017, prioritizes activities generating clinical data, reduces cash burn (work-force reduction expected to save $70M–$100M), and, as a result, extends the financial horizon without sacrificing NVAX’s flexibility to pursue new discovery programs. It formalized plans to advance a Zika virus (ZIKV) vaccine; this strategy, we think, optimally utilizes NVAX’s human capital and ability to invest its limited financial resources,” the analyst continued.

As usual, we recommend taking analyst notes with a grain of salt. According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Vernon Bernardino has a yearly average loss of -23% and a 22% success rate. Bernardino has a -31% average loss when recommending NVAX, and is ranked #4075 out of 4200 analysts.

Out of the 8 analysts polled by TipRanks, 6 rate Novavax stock a Hold, while 2 rate the stock a Buy. With a return potential of 408.5%, the stock’s consensus target price stands at $7.17.

 

  • Waqar Ali

    There are two aspects to be considered when analyzing a biotech company such as NOVAVAX: first is their core technology of nano particles manufacturing, for NOVAVAX it is very sound, and technique has multiple applications in addition to vaccine manufacturing, the second is the success rate of what has been attempted thus far, that is function of complexity of the problem and control and documentation of the trial. Buried in the Resolve trial data is the reason for the anomaly, and it will take time to uncover. I do own the stock, and intend to keep for a long time.