Stock Analysis | Viatris Outlook - A Stock Under Pressure With Mixed Signals

Market Snapshot

Headline Takeaway: Viatris (VTRS.O) is under technical pressure with a weak chart and a recent price decline of -3.37%. Our internal diagnostic scores suggest caution, with a technical rating of just 2.82 out of 10.

News Highlights

Recent developments affecting the broader market include:

• New FDA Leadership Could Raise The Bar For Drug Approvals (May 9): Investors remain on edge about drug approval timelines, which could impact pharmaceutical companies like Viatris. The report highlights greater uncertainty for gene/cell therapies.
• Changes to US Covid-19 Vaccine Policy (May 29): Under Secretary Robert F. Kennedy Jr., the US Department of Health and Human Services has revised vaccine approval and recommendation guidelines. This could indirectly affect Viatris’ vaccine-related segments.
• Trump Fast-Tracks Utah Uranium Mine (May 31): While not directly linked to Viatris, this news underlines the unpredictable market environment shaped by policy decisions, which can increase volatility across sectors.

Analyst Views & Fundamentals

Average Rating Score (Simple Mean): 3.00

Weighted Rating Score (Performance-Weighted): 2.08

Rating Consistency: Analysts show a generally neutral stance. Goldman Sachs analyst Matt Dellatorre gave a recent "Neutral" rating with a 100% historical win rate over one past prediction.

Price Trend: The stock is currently in a downward trend (-3.37%) and aligns with a neutral weighted expectation. There's some dispersion in market sentiment, with no strong consensus for either bullish or bearish moves.

Fundamental Highlights (with internal diagnostic scores 0-10):

• Return on Equity (ROE): -35.63% (Score: 3/10)
• Revenue Growth (YoY): -8.36% (Score: 0/10)
• Price-to-Sales (P/S): 3.00 (Score: 1/10)
• Return on Assets (ROA): -0.01% (Score: 3/10)
• Cash Flow to Operating Profit (Cash-UP): -0.85 (Score: 2/10)
• Net Profit Margin (NPM): -0.13% (Score: 2/10)
• Inventory Turnover Ratio: 1.07 (Score: 2/10)
• Inventory Turnover Days: 168.26 (Score: 2/10)
• Income Tax / Total Profit: 8.07% (Score: 2/10)

Money-Flow Trends

Viatris has seen mixed fund flows in recent data. Large institutional flows are positive with 51.88% of large money inflows, while small retail flows also show a positive trend at 50.73%. Medium flows were slightly bearish (-0.03%), and extra-large flows turned negative. Overall, big money is more bullish than retail, with an overall inflow ratio of 50.02% and 50.02% block inflow ratio. The score for fund-flow trends is strong at 7.62/10.

Key Technical Signals

Recent Indicator Activity (Last 5 Days):

• MACD Death Cross (July 28): Scored 7.42/10 internally. Historical win rate is 66.67% with an average return of 0.84%.
• WR Overbought (July 21, 19, and 22): Scored 1/10 internally. Historical data shows a weak win rate of 36.54% and average return of -0.78%.
• RSI Overbought (July 21, 19): Scored 1/10 internally. Historical win rate is 28.57%, with an average return of -2.65%.
• Bearish Engulfing (July 20): Scored 5.49/10 internally. Historical win rate is 55.56% and average return of 0.72%.
• Ex-Dividend Date (July 22): Scored 1/10 internally. Historical win rate is 25% with an average return of -1.01%.
• Dividend Record Date (July 22): Scored 1/10 internally. Same bearish signal with a 25% win rate and -1.01% average return.

Overall Technical Signal: The chart is bearish with 4 negative indicators vs. 1 bullish one. Key insights: Technical momentum is weak, and risk of further decline is high. The overall technical score is a poor 2.82/10.

Conclusion

Viatris faces a challenging outlook, with a weak technical profile and mixed fundamental signals. Although institutional investors are slightly bullish, recent technical indicators like overbought levels and dividend-related dates are dragging the stock down. With a low technical score and bearish momentum, it may be wise to consider waiting for a pull-back before considering a position. Monitor the stock for signs of a reversal or improvement in fundamentals, particularly in key metrics like ROE and revenue growth.