Moderna Shares Drop Amid Broad Selling
Shares of Modern are down 7% today as higher government bond yields put significant pressure on high-growth stocks.
There is a wide sale in the market, and S&P 500 has fallen by almost 2%. Moderna stocks are underperforming as they have gained nearly 300% so far, so traders are ready to take some gains off the table at signs of broader weakness.
Recent comments from CEOs of Moderna and Pfizer, which indicated that life could return to normal within a year, may have put some additional pressure on the stock, although the current weakness appears to be mainly related to the sell-off of riskier assets driven by higher government bond yields .
What’s next for Moderna Stock?
Analyst estimates for Moderna have continued to rise in recent weeks. Currently, analysts expect Moderna to report earnings of $29.77 per share in 2021 and $26.97 per share in 2022, so the stock is trading at 14 forward P/E. It should be noted that the gap between the 2021 estimates and the 2022 estimates is narrowing as analysts predict that vaccine demand will be very high in 2022.
The key question for Moderna’s valuation is whether demand will remain strong in 2023. This question currently has no real answer as there are no serious predictions for the course of the pandemic in 2023 as the world is focused on the current problems.
In this environment, Moderna’s stock will remain in the hands of traders’ sentiment on vaccine stocks and the general market mood. In the event that traders calm down after the rapid rise in government bond yields, Moderna stock has a good chance of returning to recent highs as the rapid pullback should attract enough traders looking for opportunities in the current market environment. . If government bond yields continue to rise at a rapid pace and high-growth stocks continue to be under pressure, Moderna stock is likely to fall along with its competitors.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire