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

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