Novavax, Inc.(NASDAQ: NVAX) has seen an incredible year in stock price growth, increasing 1,1711.50% YTD. The companies COVID-19 vaccine saw the market rally behind NVAX, posting a 52 week high in August of $189.40. The company announced yesterday an agreement of principle with the Commonwealth of Australia for Acquisition of 40 million doses of NVX-CoV2373. The companies share price rallied upon this new found agreement which poses further questions for investors moving into 2021. This article will breakdown analysts forecasts and our take on the Novavax stock 2021 forecast.
What are analysts forecasting for NVAX stock?
According to NASDAQ data, the 12 month price targets set by 5 analysts suggest an average price of $207.25. This suggests an upside potential of 132% over the next 12 months. The more bullish price targets suggest targets as high as $290 (225% upside potential) and more conservative targets at $105 (upside of 17%). These targets are good signs for investors as even the lowest quartile of price targets remain above the current price.To summarise what this means for investors, analysts are suggesting NVAX has room to grow over the next 12 months.
To put these targets into perspective, our article in August this year noted the average price target from analysts was $132. This is a 56% increase in average price forecasts in the space of 3 months. The bullish sentiment continues to build for Novavax as they edge closer to the results of the Phase 3 trials.
The institutions have weighed in
The more noteworthy analysts who have weighed in on the COVID-19 vaccine contender are JP Morgan Chase, Cantor Fitzgerald, Ladenburg and HC Wainwright. On the 5th of September JP Morgan had upgraded the stock status to overweight and updating their 12 month price target to $275 from $105. Interestingly, on the same day Ladenburg had downgraded the stock to a sell rating and a price target of $105. This had left investors torn between both ratings and what they meant for the stock price.
What are the revenue forecasts for Novavax stock?
Firstly, the revenue forecasts for Novavax moving into 2021 are very strong. The 2021 revenue forecasts are expected to increase 181% year on year, from $971 million in 2020 and $2.73 Billion in 2021. The lower end forecasts suggesting $1.4 Billion revenue in 2021 and higher quartile estimates closing on $4 Billion. These are impressive improvements for NVAX in comparison to its 2018-2019 results.
These positive forecasts are driven by the companies impeccable positioning to be one of the first to market a FDA approved COVID-19 vaccine to the world. However it’s worth noting these forecasts will continue to change as we move closer to 2021. As we know, the COVID-19 vaccine industry on wall street remains one of the more volatile. This is the risk investors take when entering the newly founded COVID-19 vaccine sub-market.
What are the bears saying about NVAX?
To begin with, Novavax stock forecasts from analysts definitely illuminate the long term potential the company holds for capitalisation. However, after research the COVID vaccine since inception, investors need to understand what data driven volatility means and how it effects the stock price. Firstly, data driven volatility is the market behaviour experienced when certain trial data is expected to be released. Speculation is the key driver of this and is why the COVID vaccine market is so attractive (risk reward).
Although investors see security in NanoFlu if the COVID vaccine fails to reach finalisation, the stock could take a tremendous fall upon any negative related vaccine data. The bears argue that the speculation and “perceived positioning” of the company has inflated Novavax’s stock forecasts. This is the calculated risk associated when entering a data driven volatility.
Before I begin, I am obliged to remind our viewers that this article is not financial advice but rather investment commentary from extensive research.
In conclusion, the forecasts provided from analysts maintain their bullish venom. Next year will be key for Novavax’s future, especially if they can secure success in the Phase 3 trials. Positive Phase 3 data will secure 40 million doses to be sent to Australia alone, not to mention the 60 million to the UK. This is one of my key stocks to watch as we move into 2021.
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The information above is not financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.