Moderna gets a boost on S&P 500 inclusion news
Stock viewed as ‘Tesla of biotech,’ analyst says
Moderna Inc. jumped to a fresh record after S&P Dow Jones Indices said it plans to add the company to its benchmark index next week.
The COVID-19 vaccine maker will replace Alexion Pharmaceuticals Inc. in the S&P 500 Index before the opening of trading on July 21. Alexion is set to be acquired by U.K. drugmaker AstraZeneca Plc.
Moderna shares have skyrocketed more than threefold over the past 12 months with its coronavirus inoculation getting emergency use authorization in the U.S. in December, just a week behind the first approval for Pfizer Inc. and BioNTech SE’s vaccine. This week, its market valuation surpassed $100 billion (U.S.), putting it in an elite group of biotech firms of that size.
As an innovator breaking new ground in messenger-RNA, the stock is viewed as the “Tesla of biotech,” according to Michael Yee, a Jefferies analyst. Moderna is expected to boost its 2021 revenue guidance when the company reports second quarter results, likely in August, he said raising his share price target to a Wall Street high of $250 from $170, according to a report published Thursday.
Managers of index mutual funds and exchange-traded funds, who either track the S&P 500 or use it as a benchmark, could be looking at selling shares of other stocks listed on the gauge in order to add Moderna shares, potentially further propelling its gains this year.
The drug developer has rallied over 170 per cent so far this year, making it the top-performing stock on the Nasdaq 100 Index. Its meteoric rally thus far could put it at the top spot of the S&P 500 when it joins next week. The current best-performing stock on the benchmark is L Brands Inc., with a 98 per cent surge.