Analyst Upgrade, FDA Approval Send Moderna Stock Higher

Piper Sandler upgraded the stock to "overweight"

Deputy Editor
Oct 15, 2021 at 10:25 AM
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The shares of Moderna Inc (NASDAQ:MRNA) are up 1.7% at $337.19 this morning, adding to yesterday's 3.2% pop. On Thursday, a U.S. Food and Drug Administration (FDA) panel recommended approval of the company's Covid-19 vaccine booster dose for those over 65 or at high risk. Additionally, Piper Sandler upgraded MRNA to "overweight" from "neutral," noting that the stock currently sports an attractive entry point. 

MRNA looks ready to string on its fifth-daily win, marking its longest win streak since early September. However, the 80-day moving average, which the stock gapped below in early October, still looms as potential resistance. The $300 level stepped in as a floor for this sharp pullback, though, and MRNA sports an impressive 223.5% lead for the year. 

The brokerage bunch has remained cautious on Moderna stock. Coming into today, only four of the 14 covering the stock consider it a "strong buy," compared to eight "hold" ratings, and two "sell" or worse ratings. The 12-month consensus price target of $340.17, meanwhile, is just a slim 1.2% premium to current levels. 

This bearishness is reflected in MRNA's options pits, where the stock sports a 10-day put/call volume ratio that stands in the 97th percentile of its annual range at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). In other words, puts are being picked up at a much quicker-than-usual clip. 

Speculating on MRNA's next move with options might be a prudent play, too, especially considering the equity's Schaeffer's Volatility Index (SVI) of 60% stands higher than only 9% of readings from the past 12 months. This means options traders have been pricing in relatively low volatility expectations for Moderna stock at the moment. Adding to this, MRNA's Schaffer's Volatility Scorecard (SVS) ranks at 98 out of a possible 100, implying that the equity tends to exceed said volatility expectations. 

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