BofA upgrades Moderna stock rating on cancer drug progress

BofA Securities has upgraded Moderna's stock rating to Neutral from Underperform and increased its price target from $40 to $170. The upgrade comes after positive data from Moderna's intismeran drug in adjuvant melanoma treatment. This development marks a significant milestone for the company, allowing it to diversify beyond infectious disease.

Moderna's shares have surged 135% over the past year, outperforming the NBI index's 4.5% gain. The company's year-to-date return is a strong 113.5%, bringing its market capitalization to $60.8 billion. However, InvestingPro analysis indicates that Moderna is currently overvalued compared to its Fair Value. The firm believes the stock's high return over the last year and its growth potential in both infectious disease and oncology sectors make it among the most overvalued equities.

While there are questions about the size of the potential oncology franchise and upside for the shares, a clear benefit with a hazard ratio of 0.6 to 0.7 at an upcoming medical meeting could lead to a more positive outlook.