RBC Capital downgraded Novavax (NVAX) to underperform from sector perform, explaining that the stock's recent run up to above $6 per share is unjustified.
Analyst Ken Trbovich says the move is based on fear of the avian flu outbreak, not fundamental valuation. He feels expectations are way ahead of the company's ability to deliver a safe functioning vaccine (tested in humans) with validated commercial scale manufacturing. He believes these are essential minimum requirements that must be met before the company can reap profit from newly found focus on flu. He also believes valuation is so far in front of so many other small companies with focus on flu and other vaccines, Novavax stock has the potential for a significant sell-off when the bird flu scare cools.