Bank of America lowered its rating on Novavax to Underperform from Neutral, citing mounting questions about the vaccine maker’s long-term growth prospects despite recent progress in stabilizing operations. The firm cut its price target to $7 from $9.

Analysts said Novavax has executed well in recent quarters, slashing operating expenses by roughly two-thirds from pandemic-era highs and shoring up its balance sheet. But they warned that key growth drivers remain uncertain. Demand for its COVID-19 shot, Nuvaxovid, is expected to fade as the vaccine targets the JN.1 variant, while the dominant strain in circulation is now NB.1.8.1. New clinical studies will likely be needed under the Food and Drug Administration’s updated vaccine framework, which requires more rigorous—and costly—trials as new strains emerge.

The heightened regulatory bar could also complicate potential partnerships for Novavax’s experimental COVID-19/influenza combination vaccine, the analysts said. While the company has enjoyed a short-term lift amid funding cuts to some mRNA rivals, Bank of America believes the outlook for sustainable growth is limited.

Novavax shares have swung sharply this year as investors weigh the company’s retrenchment efforts against a narrowing path for growth in a post-pandemic market.

• • BofA Rating: Downgraded to Underperform (from Neutral)
  • Price Target: $7 (cut from $9)
  • Key Concern: Limited demand for Nuvaxovid as variant shifts
  • Regulatory Pressure: FDA requiring larger, costlier trials
  • Cost Cuts: Operating expenses reduced by ~66% from peak
  • Pipeline Focus: COVID-19/flu combination vaccine candidate

The post Novavax Shares Cut to Underperform by Bank of America on Growth Concerns appeared first on citybiz.

This contant was orignally distributed by citybiz. Blockchain Registration, Verification & Enhancement provided by NewsRamp™. The source URL for this press release is Novavax Shares Cut to Underperform by Bank of America on Growth Concerns.