Moderna, Inc.

MRNA Details

Moderna, Inc. (NASDAQ: MRNA) is a biotechnology company that develops therapeutics and vaccines based on messenger RNA (mRNA) for the treatment of rare, infectious, cardiovascular, immuno-oncology, and auto-immune diseases. The company currently has 13 programs in clinical trials and 30 development programs in six modalities, including prophylactic and cancer vaccines, intratumoral immuno-oncology, and various therapeutics. It has collaborated with various companies for the manufacturing of COVID-19 vaccines. As of June 18, 2021, the company’s market capitalization stood at USD 79.98 billion.

Additional COVID-19 Vaccine Sales to US Government: On June 16, 2021, the company announced that the US government purchased an additional 200 million doses of its COVID-19 vaccine, with an option to purchase other COVID-19 vaccine candidates from the company’s pipeline. As a result, MRNA has sold a total of 500 million COVID-19 doses to the US government (including 110 million and 90 million doses to be delivered in Q4FY21 and Q1FY22, respectively).

Various Collaborations for COVID-19 Vaccine Sales: During June 2021, MRNA partnered with various pharmaceutical companies including Magenta Investments, Tabuk Pharmaceutical Manufacturing Company, and Medison Pharma, to distribute and commercialize its COVID-19 vaccine and future variant-specific booster candidates (once authorized) in the UAE, Saudi Arabia, Central Eastern Europe and Israel. It also signed an agreement with Thermo Fisher Scientific, for sterile manufacturing services and supply packaging for the vaccine.

Q1FY21 Results: The company reported an exponential increase in total revenue to USD 1.94 billion in Q1FY21 (ending March 31, 2021) compared to only USD 9.0 million in Q1FY20, resulting from USD 1.73 billion of commercial sales of its COVID-19 vaccines in the US and internationally in Q1FY21. Net income for Q1FY21 was USD 1.22 billion vs a net loss of USD 124.0 million reported in Q1FY20.

Key Risks: Most of the company’s pipeline is in preclinical development, and require extensive preclinical studies before initiating clinical trials. Hence, there can be no certainty that MRNA will be able to submit Investigational New Drug Applications (INDs) or similar applications for its preclinical programs or if the INDS will result in regulatory approvals allowing clinical trials to begin. Moreover, MRNA may be subjected to suspensions/withdrawal of prior approvals if its products fail to comply with the regulatory requirements, which could negatively impact its business and financial condition.

Outlook: In its Q1FY21 Report, MRNA stated that it stated that it expects to supply 800-1,000 million COVID-19 doses in FY21, with these estimates increasing to up to 3,000 million in FY22. MRNA stated that it has signed Advance Purchase Agreements (APAs) for scheduled delivery of USD 19.2 billion in anticipated product sales (mostly for COVID-19 vaccines) in FY21, including sales already recorded for Q1FY21.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

(Analysis by Kalkine Group)

* % Premium/(Discount) is based on our assessment of the company’s NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

MRNA Daily Technical Chart

Stock Recommendation: MRNA stock increased by 38.58% and 185.09% in the past 3 and 9 months, respectively, and is currently leaning towards the higher end of the 52-week range of USD 54.21 to USD 227.71. The stock is currently trading above its 50 and 200 DMA levels, and its RSI Index is 55.91. We have valued the stock using the EV/Sales-based relative valuation methodology and arrived at a target price of USD 163.28. Considering the uptick in the stock price in the past 3 and 6 months, the extensive product pipeline, revenue relating solely to COVID-19 vaccine sales, and current valuation, we recommend an “Expensive” rating on the stock at the closing price of USD 199.19, down 1.62% as of June 18, 2021.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.

Beyond Meat, Inc.

BYND Details

Beyond Meat, Inc. (NASDAQ: BYND) is a multinational food company, which offers a portfolio of revolutionary plant-based meats made from simple ingredients without GMOs, bioengineered ingredients, hormones, antibiotics, or cholesterol. The company's products are designed to have the same taste and texture as animal-based meat while being better for people and the planet. BYND’s products are available in 118,000 retail and foodservice outlets in over 80 countries worldwide. As of June 18, 2021, the company’s market capitalization stood at USD 9.17 billion.

Launching Value 6-Pack Burgers in Canada: On May 27, 2021, the company launched its first-ever value 6-pack of its signature ‘Beyond Burger’ in Canada, which will be sold in major grocery stores across the country. These burgers can be conveniently frozen and have a suggested retail price of CAD 19.99 per pack.

Partnering with Pizza Hut Canada: On May 17, 2021, BYND announced the expansion of its global partnership to introduce new plant-based protein items to Pizza Hut Canada’s menu. The company stated that these plant-based menu items are designed to deliver the meat-like flavor and juicy texture with the added nutritional and environmental benefits of plant-based protein.

Q1FY21 Results: The company reported a 11.42% increase in net revenue to USD 108.16 million in Q1FY21 (ending April 03, 2021) compared to USD 97.07 million in Q1FY20 (ending March 28, 2020) resulting from increased retail channel sales, which were offset by a decline in foodservice channel sales due to the impact of COVID-19. Net loss for Q1FY21 was USD 27.27 million vs a net income of USD 1.82 million reported in Q1FY20.

Key Risks: The company relies on a limited number of suppliers for its raw materials. Hence, the company’s results of operations could be adversely affected if any of its suppliers discontinue or seek to alter their relationship with it. In addition, the food distribution industry involves inherent legal and other risks, and is being subject to increasing governmental scrutiny. Shipment of adulterated or misbranded products can result in criminal or civil liability, and could also expose the company to product liability, negligence or other lawsuits. Any judgment against BYND could negatively impact its brand name and future operations.

Outlook: For Q2FY21, BYND expects its net revenues to in the range of USD 135.0 million to USD 150.0 million, representing a 19% to 32% year-on-year growth.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

(Analysis by Kalkine Group)

* % Premium/(Discount) is based on our assessment of the company’s FY21E trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

BYND Daily Technical Chart

Stock Recommendation: MRNA stock increased 36.38% in the past 1 month, and is currently leaning towards the lower end of the 52-week range of USD 99.86 to USD 221.00. The stock is currently trading above its 50 and 200 DMA levels, and its RSI Index is 56.36. We have valued the stock using the EV/Sales-based relative valuation methodology and arrived at a target price of USD 120.20. Considering the uptick in the stock price in the past 1 month, Canadian product launches, positive future outlook and current valuation, we recommend an “Expensive” rating on the stock at the closing price of USD 145.37, down 2.83% as of June 18, 2021.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.

Harley-Davidson, Inc.

HOG Details

Harley-Davidson, Inc. (NYSE: HOG) is engaged in the manufacturing and sale of motorcycles through a network of independent dealers and e-commerce channels in the US, Canada, EMEA, Asia-Pacific, and Latin America. The company operates in two segments namely, 1) Motorcycles and Related Products, focussed on designing, manufacturing, and selling Harley-Davidson motorcycles and motorcycle parts, accessories, general merchandise and services, and 2) Financial Services, which provides wholesale and retail financing services for the purchase of new and used Harley-Davidson motorcycles, motorcycle insurance, extended service contracts, and motorcycle maintenance protection. As of June 18, 2021, the company’s market capitalization stood at USD 6.73 billion.

Launching an All-Electric Motorcycle Brand: On May 10, 2021, the company announced the launch of LiveWire, an all-electric (EV) motor brand. Through this brand, HOG plans to innovate and develop technology that will be applicable to Harley-Davidson electric motorcycles in the future. The first LiveWire branded motorcycle is scheduled to launch on July 08, 2021, which will also premiere at the International Motorcycle Show on July 09, 2021.

Q1FY21 Results: The company reported a 9.57% increase in total revenue to USD 1.42 billion in Q1FY21 (ending March 31, 2021) compared to USD 1.30 billion in Q1FY20, due to strong sales from both Motorcycles and Financial Service segments. Revenue from Motorcycles and Related Products segment witnessed growth due to strong retail demand for Touring motorcycles, and contributed 86.62% of the total revenue in Q1FY21. Net income for Q1FY21 was USD 259.14 million vs USD 69.69 million reported in Q1FY20.

Key Risks: The company relies on a single or limited suppliers for its requirement of specific parts and hence, any change in its relationship with the suppliers, or in the price and availability of raw materials can adversely affect HOG’s business and results of operations. Also, HOG depends on its distributors and independent dealers to sell its motorcycles and related products and services. If the distributors and independent dealers are not successful in these endeavours, then the company will be unable to maintain/grow its revenues and meet its financial expectations.

Outlook: For FY21, the company expects the revenue from its Motorcycles segment to grow by 30% to 35%. The Motorcycles segment operating income margin is estimated to be in the range of 7% to 9%, and Financial Services segment operating income will grow by 50% to 60%. Additionally, capital expenditure for FY 21 would be expected in the range of USD 190 million to USD 220 million.

Valuation Methodology: EV/EBITDA Multiple Based Relative Valuation

(Analysis by Kalkine Group)

* % Premium/(Discount) is based on our assessment of the company’s FY21E trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

HOG Daily Technical Chart

Stock Recommendation: HOG stock increased 24.17% and 73.42% in the past 3 and 9 months, respectively, and is currently leaning towards the higher end of the 52-week range of USD 22.56 to USD 52.06. The stock is currently trading between its 50 and 200 DMA levels, and its RSI Index is 36.23. We have valued the stock using the EV/EBITDA-based relative valuation methodology and arrived at a target price of USD 36.21. Considering the consistent uptick in the stock price, recent launch of an EV brand, positive future outlook and current valuation, we recommend an “Expensive” rating on the stock at the closing price of USD 43.77, down 1.95% as of June 18, 2021.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.