Asset Structure Analysis
Viatris’ total assets were $47.7 billion as of December 31, 2023, down from $50 billion as of December 31, 2022.
Intangible assets, net were $19.2 billion as of December 31, 2023, accounting for 40.3% of total assets.
Goodwill was $9.9 billion as of December 31, 2023, making up 20.8% of total assets.
Total current assets were $13 billion as of December 31, 2023, consisting of 27.3% of total assets.
Among total current assets, cash and cash equivalents were $992 million.
Many company regard acquiring another company as expand strategy, and Viatris is not a exception.
The amount of intangible assets and goodwill reflect a lot of acquisitions, which is completed by the company.
Liquidity and Solvency
Total current liabilities were $7.8 billion as of December 31, 2023.
The current ratio was 1.67 times for fiscal 2023.
Total liabilities were $27.2 billion as of December 31, 2023.
The debt ratio was 57% for 2023.
The debt ratio is not high, but the debt ratio is undervalued as the amount of intangible assets and goodwill is very huge.
Profitability Analysis
There is a continuous downward trend about Viatris’ revenues.
Viatris’ revenues were $15.4 billion, $16.3 billion and $17.9 billion in 2023, 2022 and 2021, respectively.
The revenues in 2023 were down 5.5% year on year.
The revenues in 2022 were down 8.9% year on year.
Earnings from operations was $766.2 million, $1.6 billion and -$34 million in 2023, 2022 and 2021, respectively.
Cash Flow Analysis
Net cash provided by operating activities were $2.8 billion, $2.95 billion and $3 billion in 2023, 2022 and 2021, respectively.
As you can see, the amount of cash flow was far more than that of earnings from operations, because the amount of depreciation and amortization did not lead to cash outflow.
the amount of depreciation and amortization was $2.7 billion, $3 billion and $4.5 billion in 2023, 2022 and 2021, respectively.
Capital expenditures were $377 million, $406 million and $457.2 billion in 2023, 2022 and 2021, respectively.
Viatris’ free cash flow was about $2.4 billion, $2.55 billion and $2.54 billion in 2023, 2022 and 2021, respectively.
Cash dividends paid were $575.6 million, $581.6 million and $399 million in 2023, 2022 and 2021, respectively.
Purchase of common stock was $250 million in 2023.
Why is the capital returned to shareholders so small compared to the amount of free cash flow?
Because Viatris has reduced it’s debt.
Viatris’ operating performance for Q1 2024
Viatris’ total revenues were $3.66 billion in Q1 2024, slightly down $3.73 billion in Q1 2023.
Net cash provided by operating activities was $614.6 million and $971.2 million in Q1 2024 and Q1 2023, respectively.
Conclusion
We estimate that Viatris’ reasonable valuation is about $15 billion, while Viatris’ market capitalization is $12.29 billion, which is equivalent to $10.32 per share.
We think that Viatris stock price is slightly undervalued.
Disclaimer: The content is for reference only and does not constitute investment advice.
Introduction
Viatris is a global healthcare company.
Viatris has four reportable segments: Developed Markets, Greater China, JANZ, and Emerging Markets. The Company reports segment information on the basis of markets and geography, which reflects its focus on bringing its broad and diversified portfolio of branded and generic products, including complex products, to people in markets everywhere. Our Developed Markets segment comprises our operations primarily in North America and Europe. Our Greater China segment includes our operations in China, Taiwan and Hong Kong. Our JANZ segment reflects our operations in Japan, Australia and New Zealand. Our Emerging Markets segment encompasses our presence in more than 125 countries with developing markets and emerging economies including in Asia, Africa, Eastern Europe, Latin America and the Middle East as well as the Company’s ARV franchise.
