Moderna (MRNA) shares surged Tuesday after Oppenheimer upgraded the stock to 'Outperform' and raised its price target to $142 per share, implying a more than 40% gain from Friday's closing price.

Analysts led by Hartaj Singh listed a number of potential catalysts, including the approval of additional commercial products by 2026 and a rebound in COVID-19 vaccine sales in 2025.

Yahoo Finance’s Seana Smith and Madison Mills break down the upgrade.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video Transcript

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SEANA SMITH: We are watching shares of Moderna surge here this morning. Up just about 11.5% among the top trending tickers here at Yahoo Finance today. The stock having its best day that we have seen since December 2022, now this all follows an upgrade from Oppenheimer to outperform Moderna is the best performer in the S&P today and also the NASDAQ 100. While those indexes do remain in the red, Moderna helping just a bit. You're looking at the S&P off about 7/10 of a percent but let's talk about this call here with Moderna.

Maddy, what was interesting to me was some of the points that the analysts had made here. He sees increasing visibility on the COVID 19 vaccine sales, not necessarily anything to be encouraged about this year. He does see a further decline but he is optimistic about a rebound here looking ahead and also the potential for more commercial products over the next couple of years.

MADISON MILLS: Yeah this is something that we've heard not only from Moderna but also for Pfizer, some new vaccines to come because right now there's only one product available coming out of Moderna. They're seeking regulatory approval both in the US and in Europe for an upcoming respiratory virus vaccine. That would be great news for those of us, I don't know about you Seana but noticing that everyone in the office has been sick lately so that would be great news to get one of those vaccines approved, obviously.

That's expected to come heading into 2025 and obviously as we remember takes a long time to get those regulatory approvals also because of some of the waning of demand for COVID related products that is potentially going to be a boon for Moderna as their operating expenses, could start to decline this year given that they're not necessarily going to have to spend as much on R&D.

SEANA SMITH: Yeah, we are seeing some optimism here among its competitors. Taking a look at Pfizer, those shares moving higher on this upgrade as well as Novavax both in the green along with a massive jump that we're seeing from Moderna here this morning. So certainly a name to have on your radar not only today but also looking ahead to the rest of 2024 given some of the catalysts that Oppenheimer called out here in this upgrade.

MADISON MILLS: Yeah it is interesting, though, it looks like Bloomberg consensus that the company's losses are going to stretch into 2027. So a couple more years of losses for this name particularly given just the amount of investment they had in the COVID vaccine creation and then that stock down 40% over the last 12 months because of vaccine sales compression.

Those sales expected to hit a new low this year but then again anticipation of an increase in those sales in 2025. Anticipating an increase in need for booster shots as a potential boon for them, which is interesting.

SEANA SMITH: Yeah and it's also important to point out there just in terms of the valuation perspective, still well off the closing high that we saw back in 2021. So when you take a look at that longer term chart shares, still off about 70% from where it closed back on August 9th in 2021. But we are seeing some optimism here in today's trading with the stock up already 12% just about 90 minutes into the trading day.