Novavax (NASDAQ:NVAX) shares dropped ~6% in the pre-market trading Thursday after JPMorgan downgraded the Maryland-based COVID-19 vaccine maker to Underweight from Neutral, citing, among other things, the company’s long-term outlook.
In addition to an updated model, the firm projects bleak prospects for the company’s COVID-19 vaccine Nuvaxovid which was the first protein-based shot to receive U.S. regulatory nod this year.
While NVAX lowered its 2022 revenue guidance in August even after weak second quarter financials, JPMorgan cites the recent vaccine uptake in the U.S. and EU to project further cuts to the outlook amid mid-to-long-term pressure on Nuvaxovid demand.
Citing strains in the balance sheet, the firm sees dilution to NVAX shares over the next 6 – 12 months as the company navigates an execution-focused period instead of a catalyst-driven period.
Setting a Dec. 23 price target of $27 for NVAX, down from a $132 per share target for Dec. 22, JPMorgan expects the company to underperform its coverage as COVID-led sentiment declines.
In May 2021, JPMorgan downgraded NVAX to Neutral from Overweight after the company projected a delayed timeline to bring the COVID-19 vaccine candidate to the market.