Viatris Inc’s lack of discernable catalysts and greater downside risk is likely to weigh on the company's share price, according to Bank of America analysts.
In an update to clients, they downgraded Viatris to ‘Underperform’ and lowered their price objective on the stock to $9 per share from $13 on concerns over the company’s 2024 outlook.
"We see Viatris as a transition story as it looks to re-deploy $2.55 billion in proceeds (from recent divestitures) for specialty brands," the analysts wrote.
They added that Viatris plans to engage in M&A but larger deals could be limited until the company closes its divestiture deals, likely in the second quarter of 2024.
Asset acquisitions will be a "show-me story" from a stock perspective given the company’s limited track record, the analysts noted.
They see downside risks for Viatris in 2024 from gross margin pressure and EBITDA drag from recent divestitures, along with potential year-over-year erosion in its base business.
Viatris is a global pharmaceutical and healthcare corporation formed through the merger of Mylan and Upjohn, a legacy division of Pfizer, in November 2020.
Shares of Viatris slipped 3% to $9 in late-afternoon trading on Monday and have fallen 21% year to date.
Contact Sean at sean@proactiveinvestors.com