Moderna falls, Peloton sees some recovery, and Kellogg rises.

Julie Hyman, Brian Sozzi, and Myles Udland discuss some of Thursday’s early movers, including Moderna’s stocks falling due to U.S. patent decision, Peloton recovery despite the recall, and Kellogg surpassing expectations as demand for products persist.

Video transcript

JULIE HYMAN: All right, we got to move on to some earnings here real quick, shall we? Moderna is one of those we've been watching, and not only because the company came out with revenue this morning that missed estimates, perhaps crimped by not being able to produce enough vaccine to meet demand, but also because of this overhang now from potential patent waivers that are going to be happening. And for Moderna, which is effectively a single product company, right? It's got some stuff in development, but, you know, that would be significant, maybe more significant, Myles, than it would be for, say, a Pfizer, which has-- makes a lot of other stuff.

MYLES UDLAND: Yeah, and I think, look, the Moderna trade right now is a big part of that peaking growth trade in a way, right? The buildup for Moderna, the bull case for Moderna was them developing, launching, selling the vaccine. Well, now the vaccine is being sold and deployed, and so the question, the natural normal question in any investing cycle becomes, what's the next leg for the company? And I think if you look at the stock over the last three or six months, obviously, there are many questions from investors about just what that is, this patent issue even aside.

JULIE HYMAN: Let's check on another one, and that is Peloton. And Peloton's actually turned higher, you guys. We initially were seeing a decline in those shares following that recall that was announced yesterday. Seeing a little bit of a bounce here-- it's up by 2%. And Brian, you know, we have had some analysts come in here and say, OK, it's going to cost the company some money, but then it's going to move on.

BRIAN SOZZI: Right, and again, they have the financial resources to address any potential liabilities regarding anybody who was hurt or who may be hurt by these treadmills. Now there's also a cost of getting these treadmills out of people's homes. I mean, we talked about it yesterday. They have to send vans and get the treadmills to folks who do want to return them.

But ultimately, you have to wonder what gets Peloton shares working again. The stock has been below the 50-day moving average-- get a little key technical analysis here-- below the 50-day moving average since mid-February. And really, it's unclear what would get the stock moving sustainably higher again, like it did for the bulk of last year. I think you're going to have to see a re-acceleration in growth rates, and you're going to have to see the treadmill come back onto the market with improved safety features.

And then last, but not least, you have to see people go out there and plunk down large sums of money to buy whatever new treadmill that Peloton comes out with. So there's a lot of-- I think it's a lot-- it's going to be a lot harder to invest in Peloton for the next six months than it was the prior six months.

MYLES UDLAND: And, you know, just something else, our friend [INAUDIBLE] flagged us on Twitter earlier today. You look at that stock chart over the last year. Clearly, there have been questions-- same thing with Moderna as well. There could have been questions about what the story is here for Peloton beyond the pandemic. And so, you wonder how much of this selling pressure on this news story is an excuse for people who were starting to wonder if, indeed, this is a $100 billion treadmill company.

And remember when it went public? It was, like, $10 billion for the bike. This is crazy. Well, the stock is worth, what, four or five times that right now. So I think still a lot of growth embedded in the price today that I think there are, obviously, more questions about now than there have been over the last couple of months.

JULIE HYMAN: Yes, most definitely. All right, let's talk about food. Kellogg is one that you're watching, Brian. After that company's numbers, we've been talking to a lot of food companies about inflation. What did Kellogg see?

BRIAN SOZZI: So Kellogg is calling out inflation. Now they said they have been managing through what they call revenue management. I'm talking with Kellogg's CEO Steve Cahillane right after the show. So I will be asking him how they are offsetting some of this inflation they are seeing. But overall, a pretty good quarter from Kellogg. Still sustaining some of that growth that they had at the height of the pandemic late last year, just like a lot of other food manufacturers.

Fun fact here-- Myles, you noted this contrarian thing regarding a chart they put out from Kellogg's on Twitter. Fruit Loops appears to be supply constrained right now. And full disclosure-- I didn't even see that in that graph that I tweeted out. I just saw that Little Debbie's is now making oatmeal cereal, which I'm very excited about.

MYLES UDLAND: Yes, Sozz, I'm looking at the graphic now. Fruit Loops and Frosted Flakes are both supply constrained. But look, we've got Cinnamon Roll Frosted Mini Wheats, Little Debbie Oatmeal Cream Pies Cereal, and Cinnabon Jumbo Snacks all coming to market. I mean, talk about options.

BRIAN SOZZI: Life is good.

JULIE HYMAN: Ugh, no thank you.