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Moderna Stock Crosses $100 Billion Cap; But Can Earnings Outmaneuver Delta?

Moderna stock continued its recent sprint Wednesday, crossing the line at a $100 billion market cap for the first time, as the Delta variant gained speed.




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Now, all eyes are on Moderna stock as the second-quarter earnings season approaches. Moderna (MRNA) will likely report its earnings in August. This was Moderna’s second full quarter of Covid vaccine sales. Analysts expect a strong profit, swinging from year-earlier losses, and quadruple-digit sales growth.

Meanwhile, public health officials are keeping an eye on the Delta variant, first discovered in India. Early Wednesday, the U.S. had 118 new reported cases, according to Worldometer. That brought the total since the pandemic began to north of 34.8 million cases.

“U.S. case rates are spiking meaningfully, especially in certain areas, and appear to be on their way to another wave despite reasonably broad vaccinations, as the higher transmission (rate) of the Delta strain is overcoming any partial herd immunity,” RBC Capital Markets analyst Brian Abrahams said in a note to clients.

In morning trading on the stock market today, Moderna stock popped 5.5% near 248.

Moderna Stock Hits Record High

Moderna is bullish on its chances of tackling the Delta variant. Last month, the biotech company said its Covid vaccine generated neutralizing antibodies against several variants, including Delta. Neutralizing antibodies are a key part of the body’s immune response.

In comparison to the original strain, the Delta variant resulted in 2.1-fold fewer antibodies. But that was still better than other mutations. The Beta variant, first found in South Africa, led to a 7.3- or 8.4-fold reduction in antibodies.

“As we seek to defeat the pandemic, it is imperative that we are proactive as the virus evolves,” Chief Executive Stephane Bancel said in a written statement. “These new data are encouraging and reinforce our belief that the Moderna Covid-19 vaccine should remain protective against newly detected variants.”

On the day of that announcement, June 29, Moderna stock rose 5.2%.

What To Expect During Earnings

For the second quarter, Moderna stock analysts call for adjusted profit of $6.04 per share and $4.28 billion in sales. In the year-earlier period, Moderna lost 31 cents per share. Sales would soar 6,381%.

It’s still unclear what impact Delta and other variants will ultimately have on vaccine makers. RBC’s Abrahams expects the U.S. to experience an eightfold to 30-fold increase in Covid cases over the next 1-2 months.

He also looked at rising cases in the U.K. and Israel. Vaccinated people also are contracting Covid.

This “suggests that the Delta variant is infecting vaccinated individuals and/or is spreading more rapidly among unvaccinated populations, with transmissibility that overcomes any proactive effects of population immunity,” he said.

Highly Rated Biotech Stock

Moderna stock hit a record high on Wednesday.

Shares are now bullishly extended from a buy point at 189.10 out of a cup-with-handle base, according to MarketSmith.com.

Moderna also has a Relative Strength Rating of 97. This puts Moderna stock’s 12-month performance in the top 3% of all stocks regardless of industry group, IBD Digital shows.

Follow Allison Gatlin on Twitter at @IBD_AGatlin.

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