Is Viatris a good buy opportunity at the current share price?

Wall Street’s three main indexes are advancing this Thursday; treasury yields are dropping, and buying sentiment remains high. Viatris Inc. (NASDAQ: VTRS) shares are still not able to stabilize above $15 despite the fact that the company raised the outlook for the 2021 fiscal year.

Viatris’s business continues to grow

Viatris is an American global healthcare company that produces and sells a variety of medicines, with 1,400 approved therapeutic molecules in its portfolio. Viatris was created by the merger of Mylan and Pfizer’s Upjohn, and if you are looking for a solid return potential, shares of this company can be a good choice for long-term investors.

Viatris reported better than expected earnings results in August; total revenue has increased by 67.8% Y/Y to $4.58 billion, while the Non-GAAP EPS was $0.98 (beats by $0.10). Viatris’s business continues to grow, and the company raised the outlook for the 2021 fiscal year.

The momentum the company achieved during the second quarter reflects the fact that Viatris is a global leader in generic drugs, which are expected to eventually make up about 90% of all global drug volumes. For the full year, Viatris expects total revenue to be in a range between $17.5 billion – $17.9 billion, while the adjusted EBITDA should be between $6.15 billion to $6.45 billion.

The company’s management remains very optimistic about the upcoming quarters in terms of growth, and according to the management, Viatris’ margins are expected to improve in the coming years steadily. Michael Goettler, CEO of Viatris, added:

Our unique global platform has the ability to consistently generate substantial free cash flows, and we anticipate significant increases in the coming years, driven by continued strong performance, a reduction in one-time cost, and continued improvement in cash flow conversion.

Fundamentally looking, Viatris trades at less than three times TTM EBITDA, and shares of this company could provide solid returns over the next few years. Viatris’s balance sheet remains stable, the current dividend yield is around 1.6%, and with a market capitalization of $16.28 billion, shares of this company are not expensive.

$15 represents important resistance Data source: tradingview.com

Viatris shares continue to trade near 2021 lows, and if the price falls below $13 support, the next target could be at $12. On the other side, if the price jumps above $15 resistance, it would signal trading shares, and the next target could be at $16 or even above.

Summary

Viatris trades at less than four times TTM EBITDA, and if you are looking for a solid return potential, shares of this company can be a good choice for long-term investors. Viatris continues to improve its position in the market, and the latest financial results show that it is moving in the right direction. Despite this, Viatris shares continue to trade near 2021 lows, but if the price jumps above $14 resistance, the next target could be at $15 or even above.

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