Should you buy Moderna stock as it develops a vaccine for the Omicron variant?
- Moderna shares on Monday edged higher after revealing plans to develop a vaccine for the Omicron variant.
- The new covid variant has a more complicated mutation.
- It’s yet to be established whether existing covid vaccines can be effective against it.
On Monday, Moderna Inc. (NASDAQ:MRNA) shares edged higher after revealing plans to develop a vaccine for the Omicron variant.
The stock surged nearly 10% after it said a new covid vaccine targeting the Omicron variant could be ready by early 2022. Moderna had rocketed more than 21% on Friday amid fears of the potential impact of the new variant.
The stock is still down more than 31% from its all-time highs of $497.49, reached in August this year. As a result, the stock has swung to a net year-to-date gain of about 195%.
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From an investment perspective, Moderna shares trade at an attractive forward P/E ratio of 12.52, making the stock a compelling option for value investors.
In addition, analysts expect the company’s earnings per share to increase at an average annual rate of 16.80% per year over the next five years. Therefore, Moderna could also gain the attention of long-term growth investors.
Technically, Moderna shares seem to be trading within an ascending channel formation in the intraday chart. As a result, the stock has surged closer to the overbought conditions of the 14-day RSI.
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However, with the stock still riding strong tailwinds from the Omicron vaccine development news, it could extend gains deep into overbought conditions.
Therefore, investors could target extended gains at about $362.30, or higher at $400.15, while $296.97 and $257.91 are crucial support zones.