Moderna to Increase Vaccine Production; Stock Up 4.5%

Moderna (MRNA) plans to increase its COVID-19 vaccine production capacity to meet the growing demand for doses, according to a Wall Street Journal report citing company officials. Moderna’s stock jumped 4.54% on Monday to close at $208.24.

The company is setting up two new production lines at its U.S. plant in Boston. The first line is expected to begin production by fall, while the second line will start by early 2022. These lines will ramp up the facility’s production capacity by 50%.

Moderna expects to provide the U.S. with 300 million COVID-19 vaccine doses by the end of July, in addition to the recent order for another 200 million doses it expects to be delivered later this year.

“Our plan and our hope is that, as soon as the U.S. has enough doses, we’re allowed to export so we can help as many countries as we can around the world,” stated the report, quoting Moderna CEO Stéphane Bancel.

Moderna is also tripling its global production capacity to 3 billion vaccine doses in 2022 from about 1 billion in 2021. The company has supply orders from the European Union and the global vaccine alliance, COVAX. However, even as it expands its plant capacity, Moderna faces the challenge of securing enough raw materials to support its production processes. (See Moderna stock chart on TipRanks).

Piper Sandler analyst Edward Tenthoff maintained a Buy rating for Moderna with a price target of $246. Tenthoff’s price target suggests 18.13% upside potential. The analyst maintained his bullish rating after Moderna bagged another vaccine supply deal from the U.S. government.

Tenthoff predicts Moderna’s vaccine revenue to be $13.07 billion in 2021 and to increase to $21.25 billion in 2025. The analyst sees vaccine sales driving Moderna’s profitability and cash flow.

Consensus among analysts is a Moderate Buy based on 6 Buys, 3 Holds, and 2 Sells. The average Moderna analyst price target of $194 implies a downside potential of 6.84% from the current levels.

MRNA scores a 9 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.

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