Should I invest in Viatri’s share after the current fall?


Viatris Inc. (NASDAQ: VTRS ) stock price has decreased from $10.20 to $8.42 since September 12, 2022 and currently stands at $8.74.

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The dividend yield is over 5% at the current share price

Viatris is an American global healthcare company that manufactures and markets a range of medicines with 1,400 approved therapeutic molecules in its portfolio.

Although the company’s business remains steady, Viatris’ share price fell to a fresh 14-year low of $8.42 last month.

The current share price is $8.74, which is attractively valued given its earnings, outlook and dividend.

In the last fiscal year, Viatris was able to increase its total revenue by about 50%, from USD 11.81 billion in 2020 to USD 17.81 billion in 2021. It looked even better when it came to EBITDA, which grew from $2.65 billion in fiscal year 2020 to $6.18 billion in fiscal year 2021.

For fiscal year 2022, Viatris expects total revenue to be between $16.2 billion and $16.7 billion, while Adjusted EBITDA is expected to be between $5.8 billion and $6.2 billion. Michael Goettler, CEO of Viatris said:

We’ve proven that for six straight quarters now with very solid, strong performance. We are no longer dependent on what happens to a product or part of the company, regardless of where in the world we have waste compensation.

Viatris has an extremely diversified business with more than 3,000 products, brands, generics, complex generics and biosimilars, giving the company stability in a time of global uncertainty.

On a positive note, in August the board again announced a quarterly dividend of $0.12 per share, giving investors a dividend of over 5% at the current share price.

With a market cap of $11.13 billion, Viatris is undervalued and compared to Gilead Sciences, Inc. (NASDAQ: GILD ), Viatris is cheaper on a price-to-sales basis.

On a price-to-sales basis (market cap/sales), Viatris stock trades at 0.64, which is several times lower than Gilead Sciences’ price-to-sales multiple, which trades at a P/E of 2, 96 .

It is also important to note that Pfizer Inc. (NYSE:PFE) trades at more than double this year’s sales and more than 5 times TTM EBITDA. Viatris trades at less than 2x TTM EBITDA, book value per stock is above $15, and for investors looking for attractive and reliable dividends, this stock can be a good choice.

$8 represents the current support level

Viatri’s share price has fallen from $10.20 to $8.42 since September 12, 2022 and is currently trading at $8.74.

The price has moved back below the 10-day moving average, indicating that the bottom is not yet in place. Despite this, shares of this company could provide great returns for long-term investors.

Data source: tradingview.com

The current support level is $8, while $10 is the first resistance level. If the price falls below $8, that would be a sell signal and open the way to $7.5 or even below. Conversely, if the price rises above $10, the next target may be $11.

Summary

Viatris trades at less than 2x TTM EBITDA, book value per stock is above $15, and for investors looking for attractive and reliable dividends, this stock can be a good choice. The dividend yield is over 5% at the current share price, and with a market cap of $11.13 billion, Viatris is undervalued.

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