Novavax stock extends slide after JP Morgan turns bearish, expecting further forecast cuts


Shares of Novavax Inc. NVAX,
fell 7.1% in morning trade on Thursday, to extend their recent plunge to a nearly 2.5-year low, after JP Morgan threw in the towel on COVID-19 vaccine maker Nuvaxovid, citing expectations of further cuts in revenue guidance. Analyst Eric Joseph lowered his rating to underweight, having been neutral since May 2021, and overweight before that since August 2020. He cut his share price target to $27 from $132. The stock has now fallen 26.0% on a 5-day losing streak, to put it on course for the lowest close since May 2020. Last month, the biotech company announced a much larger-than-expected second-quarter loss and revenue that fell well below expectations and cut its full-year revenue forecast in half. Joseph wrote in a note to clients that his reading of recent vaccine dynamics in the European Union and the United States suggests that “further guidance cuts are in sight, while also highlighting medium headwinds. and long term for meaningful adoption of Nuvaxovid”. It also considers the “major stressors” of Novavax’s balance sheet and sees potential for dilutive pressure on NVAX shares over the next 6-12 months. The stock has fallen 83.2% since the start of the year, while the ETF iShares Biotechnology IBB,
fell 23.5% and the S&P 500 SPX,
lost 21.0%.


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