Maintaining Our Moderna $232 FVE Following Disappointing 3Q COVID-19 Sales

Moderna reported third-quarter COVID-19 vaccine revenue of $3.1 billion, down 35% year over year and below our expectations. Management lowered its anticipated COVID-19 vaccine sales for the full year to roughly $18 billion-$19 billion, down from prior guidance as Moderna experienced supply constraints during the shift to bivalent vaccine production and as countries deferred contracts to next year. Moderna's gross margins have also fallen significantly as the firm operates below capacity, shifts production to new bivalent vaccines, and accounts for unsold, expiring doses. Although we've factored this new guidance into our model, we are maintaining our $232 fair value estimate, which now includes a higher U.S. price starting in 2023 as the COVID-19 vaccine market transitions from government contracts to commercial sales.