- Mylan has undergone a contraction in valuation over the last 5 years, and the upcoming Viatris merger comes at a crucial time for the company.
- The deal structure means Viatris stock looks attractive on 2021 pro forma multiples of ~5x-8x EV/EBITDA.
- Short interest has peaked at ~81% for Mylan, to cover potential trading down that occurs after these types of spinoffs, thus pricing risk is high.
- Questionable guidance and headwinds from APAC regions mean revenue growth looks thin for Viatris, offset by the large geographical reach and footprint in emerging markets.
- The company is committed to a dividend of 25% free cash flows, and deleveraging the debt ratio to 2.5x, whilst maintaining an investment grade rating.
For further details see:
Short Interest Peaks At 81% Just Prior To Mylan Merger, Cover Your Position