Moderna (NASDAQ:MRNA) shares experienced a sharp rally on Tuesday, climbing 12.2% to $155.81 by mid-morning, following a significant shift in sentiment from Wolfe Research. The upgrade comes amid a broader re-evaluation of the company's oncology pipeline, which has been a major driver of volatility in recent weeks.
Wolfe Research moved its rating on Moderna from Underperform to Peer Perform, a change that signals a more neutral but less pessimistic outlook. The firm cited a clearer regulatory path for intismeran, the company's investigational cancer vaccine, in the adjuvant melanoma setting. Wolfe estimates that intismeran could generate up to $9.2 billion in unadjusted peak sales across four different indications, a figure that represents roughly 15% of Moderna's current market value.
Trading volume was notably heavy, with 23.8 million shares changing hands by 11:25 a.m. EDT—1.8 times the stock's three-month average daily volume. The surge pushed Moderna's market capitalization to approximately $62.2 billion, underscoring the market's growing conviction in the company's oncology prospects.
The rally extends a period of intense repricing for Moderna, driven by last week's Phase 3 INTerpath-001 trial results. Moderna and its partner Merck (NYSE:MRK) announced that intismeran, when combined with Keytruda, significantly delayed melanoma recurrence or spread compared to Keytruda alone. However, the companies have yet to release detailed efficacy data, leaving some uncertainty about the magnitude of the benefit.
Tuesday's move was not isolated to Moderna. The broader biotech sector also saw gains, with BioNTech (NASDAQ:BNTX) rising about 2.9% and the SPDR S&P Biotech ETF (NYSEARCA:XBI) adding roughly 3.1%. This suggests a sector-wide boost from positive sentiment around cancer immunotherapy.
Despite the enthusiasm, the company's current financials remain a stark contrast to its valuation. Moderna reported second-quarter revenue of just $145 million and a net loss of $782 million. As of June 30, the company held $6.9 billion in cash and investments, but management projects year-end cash and investments to be between $4.7 billion and $5.2 billion, reflecting ongoing spending on R&D and manufacturing.
Management has guided for up to 10% revenue growth in 2026, but the oncology program is expected to be a key driver of future value. The challenge lies in translating peak sales estimates into actual shareholder returns, given the risks of clinical setbacks, regulatory hurdles, and the economics of the partnership with Merck.
Wall Street's price targets remain mixed. Wolfe Research did not provide a new target, but other firms such as Barclays (Equal Weight, $125), UBS (Neutral, $150), and JPMorgan (Underweight, $77) have targets that are significantly below the current trading price. The consensus target sits at $95.67, which is roughly 38.6% below Tuesday's price, highlighting the valuation tension.
Investors are now pricing in a higher probability of success for intismeran, but the stock's trajectory will depend on the release of full Phase 3 data, regulatory decisions, and the eventual commercial launch. The next major catalyst could be the detailed efficacy results, which are expected to be presented at a medical conference later this year.
For now, Wolfe's upgrade provides a new benchmark for valuation, but the market's reaction suggests that many are betting on a transformative outcome for Moderna's cancer vaccine platform. As always, the risks remain substantial, including the possibility of unexpected side effects, manufacturing challenges, and competitive pressures.
