VTRS - Viatris cut to Underweight at Barclays citing a show-me story

2023-06-23 09:50:46 ET

Barclays downgraded Viatris Inc. ( NASDAQ: VTRS ) to Underweight from Equal Weight on Friday, noting that despite its low valuation, the generic drugmaker will likely remain a "show-me narrative" until there is clarity on its future strategy.

The analyst Balaji Prasad argues that Viatris ( VTRS ), which was formed when Pfizer ( PFE ) spinoff Upjohn combined with generic drugmaker Mylan in 2020, has lost ~11% YTD and has one of the lowest upsides in their coverage.

Noting that the company has yet to provide more details on its planned non-core divestments, such as its Women’s Health business, Prasad opines that the near-term uncertainty "will likely continue to drive the stock sideways for a while."

"Even after completion of these strategic maneuvers where there is limited visibility, we expect the stock to be a ‘Show-Me’ narrative as investors need to be convinced about the growth potential of future specialty builds," the analyst added.

Prasad kept his $11 price target on VTRS unchanged, reiterating that the stock remains at least "a couple of quarters" away from reaching an inflection point.

More on Viatris

• Viatris expects return to growth as Q1 topline contracts 11%
• Despite Its Valuation, Viatris Is Still A Hold

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