Why Don't We See More Analyst Enthusiasm for Viatris (VTRS)?

Its shares falling by -4.07% today, Viatris seems to be confirming what most analysts are saying about the stock. Despite its average rating of hold, might the stock be attractive to long term value investors? Let's unpack some of the company's fundamentals to find out.

Over the last year, Viatris shares have moved 4.61% while trading between the prices of $8.24 and $12.26. This represents a 11.41% difference compared to the S&P 500, which moved -6.8% over the last 52 weeks.

At its current price of $10.13 per share, VTRS has a trailing price to earnings (P/E) ratio of 5.92 based on its 12 month trailing earnings per share of $1.71. Considering its future earnings estimates of $2.9 per share, the stock's forward P/E ratio is 3.49. In comparison, the average P/E ratio of the Health Care sector is 24.45 and the average P/E ratio of the S&P 500 is 15.97.

We can also compare the ratio of Viatris's price to its book value. A company's book value refers to its present liquidation value: what would be left if the company sold off all its assets and paid off all of its debts today. VTRS has a book value of 0.681, with anything close or below one indicating a potentially undervalued company.

The final element of our analysis will touch on Viatris's capacity to generate cash for the benefit of its shareholders or for reinvesting in the business. For this, we look at the company's levered free cash flow, which is the sum of all incoming and outgoing cash flows, including the servicing of current debt and liabilities. Viatris has a free cash flow of over $2.5 Billion, which it uses to pay its shareholders a 4.47% dividend.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.