Moderna (NASDAQ:MRNA) shares about 3% ahead of Wednesday market open after Goldman Sachs cut its rating on the stock to Neutral from Buy.

The downgrade follows a series of negative revisions to Moderna's product revenue guidance over the past six months.

Moderna’s guidance for fiscal year 2025 (FY2%) revenue from the respiratory vaccine business is between $1.5 billion and $2.5 billion, aligning with Goldman’s estimate of $1.5 billion. However, the firm voiced concerns about Moderna's visibility on this revenue stream.

The biotech firm reiterated its cash breakeven guidance for 2028, a target that was previously moved from 2026. This projection is based on an anticipated revenue of approximately $6 billion as per the September Investor Day, despite elevated operating expenses projected at around $5.5 billion for FY25.

Goldman analysts expect that Moderna will reach cash breakeven in 2029 and may need to conduct equity offerings in 2028 and 2029.

The bank highlighted several potential pipeline developments that could contribute to Moderna's revenue in the medium term, including the individualized neoantigen therapy (INT) partnered with Merck (NSE:PROR), as well as Phase 1/2 cystic fibrosis data in partnership with Vertex Pharmaceuticals (NASDAQ:VRTX) expected in the first half of 2025.

Other notable pipeline events include Phase 3 data for cytomegalovirus and norovirus vaccines in 2025, pending case accrual.

Goldman Sachs has made several changes to their model for Moderna, including revised revenue projections for the RSV and CMV vaccines due to a more conservative commercial and competitive outlook.

It also adjusted the probability of success for various vaccines, such as CMV, Epstein-Barr virus (EBV), and rare diseases, as well as R&D spend estimates “on the back of guidance and trends,” analysts said.

Alongside the downgrade, Goldman also nearly halved its price target on Moderna shares to $51 from the previous $99. The bank models for potential equity raises by Moderna in 2028 and 2029 amounting to $500 million and $350 million, respectively.

In the note, analysts outlined both upside and downside risks for Moderna, including the potential for higher sales and earlier-than-expected approvals for the INT programs, as well as other pipeline successes or competitive failures.

On the downside, risks include failure to demonstrate clinical proof of concept across additional modalities or oncology indications, intellectual property risks, manufacturing challenges, financing or dilution issues, failure to achieve commercial targets, and pushback from physicians and payers on usage and coverage.

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