MRNA is a sell; Citi downgraded to Sell with $80 target (>60% downside) as the 200% rally on cancer trials is fully priced in and valuation assumes excessive future oncology success.

We view Moderna as a "sell" product. Citigroup gave it a "sell" rating today. This comes after Moderna's recent strong performance, thanks to some positive trial results . They have downgraded its rating to "Sell" from " Neutral".

At the same time, they raised the target price for the stock, but only to 80. This is a rise from 60. So, their outlook wasn't very positive before today. This means a potential drop of more than 60% from yesterday's closing levels.

Why did they raise the target price ? As for the downgrade, they see greater value in the company and are trying to keep up with the rating. But they believe the stock has risen far beyond that improvement.

What drove this rise was the achievement of gains of more than 200% since August. This was driven by the late-stage results we had seen with regard to personalized cancer treatment .

This was developed in collaboration with Merck. The treatment uses unique properties of the patient's tumor to help the immune system recognize and fight the cancer . Therefore, it was a major breakthrough in the fight against cancer.

This is a phase three experiment. So, this was very good news, with Citi saying it is now fully priced in stock. They believe that there is a very large success that is essentially included in the price here.

They are concerned that the stock now, in terms of valuation, assumes greater success beyond this result to reach other cancers , and they believe that sales may be difficult to achieve from here.

Citi estimates that Moderna will need about $13 billion in annual oncology revenue to justify its current valuation, So, the bottom line here is that yes, this was a promising development related to this matter.

But the price assumes a lot of expectations from this point. This is just City's opinion, of course.