Insights

Why Viatris Stock Is Popping Today

What happened
Shares of Viatris (NASDAQ: VTRS) were popping on Monday, rising 5.4% as of 11:21 a.m. ET after jumping as much as 9.9% earlier in the morning. The solid gain came after the drugmaker announced its first-quarter results before the market open.
Viatris reported first-quarter revenue of $4.18 billion, down 5% year over year and below the average analyst estimate of $4.23 billion. The company posted first-quarter earnings of $399.2 million, or $0.33 per share, based on generally accepted accounting principles (GAAP). Its adjusted non-GAAP earnings came in at nearly $1.13 billion, or $0.93 per share. That easily topped the consensus adjusted earnings estimate of $0.83 per share.
The company didn’t provide earnings guidance for full-year 2022. However, Viatris did forecast that full-year revenue should be between $17 billion and $17.5 billion, with free cash flow between $2.5 billion and $2.9 billion.
So what
Investors appear to be shrugging off Viatris’ first-quarter revenue miss. They’re much more interested in the company’s commitment to continue generating strong cash flow and its overall positive execution.
Viatris expects to achieve around $600 million in revenue from new products this year. It paid down $840 million in debt in the first quarter and should retire close to $2 billion in debt by the end of 2022. The company also made income investors happy with a 9% dividend increase.
Image source: Getty Images.

Now what
The most important next step for the company is its planned deal to sell its biosimilar programs to Biocon Biologics. Viatris expects this transaction to close in the second half of this year. The deal will deprive Viatris of its strongest growth drivers, but it will generate a lot of cash for the company to use in debt reduction and funding its dividend program.
Keith Speights has positions in Viatris Inc. The Motley Fool recommends Viatris Inc. The Motley Fool has a disclosure policy. –

What happened

Shares of Viatris (NASDAQ: VTRS) were popping on Monday, rising 5.4% as of 11:21 a.m. ET after jumping as much as 9.9% earlier in the morning. The solid gain came after the drugmaker announced its first-quarter results before the market open.

Viatris reported first-quarter revenue of $4.18 billion, down 5% year over year and below the average analyst estimate of $4.23 billion. The company posted first-quarter earnings of $399.2 million, or $0.33 per share, based on generally accepted accounting principles (GAAP). Its adjusted non-GAAP earnings came in at nearly $1.13 billion, or $0.93 per share. That easily topped the consensus adjusted earnings estimate of $0.83 per share.

The company didn’t provide earnings guidance for full-year 2022. However, Viatris did forecast that full-year revenue should be between $17 billion and $17.5 billion, with free cash flow between $2.5 billion and $2.9 billion.

So what

Investors appear to be shrugging off Viatris’ first-quarter revenue miss. They’re much more interested in the company’s commitment to continue generating strong cash flow and its overall positive execution.

Viatris expects to achieve around $600 million in revenue from new products this year. It paid down $840 million in debt in the first quarter and should retire close to $2 billion in debt by the end of 2022. The company also made income investors happy with a 9% dividend increase.

Image source: Getty Images.

Now what

The most important next step for the company is its planned deal to sell its biosimilar programs to Biocon Biologics. Viatris expects this transaction to close in the second half of this year. The deal will deprive Viatris of its strongest growth drivers, but it will generate a lot of cash for the company to use in debt reduction and funding its dividend program.

Keith Speights has positions in Viatris Inc. The Motley Fool recommends Viatris Inc. The Motley Fool has a disclosure policy.

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