Should you invest in Viatris Shares after strong Q2 performance?

Viatris Inc. (NASDAQ: VTRS) shares have weakened from their recent highs above $18 registered in February 2021, and the current price stands around $15. Viatris reported its second-quarter results yesterday and further raised the outlook for the 2021 fiscal year.

Fundamental analysis: Viatris raised the outlook for the 2021 fiscal year

Viatris is an American global healthcare company that produces and sells a variety of medicines, with 1,400 approved therapeutic molecules in its portfolio. Viatris’s business continues to grow, and the company reported better than expected earnings results this Monday. Total revenue has increased by 67.8% Y/Y to $4.58 billion, while the Non-GAAP EPS was $0.98 (beats by $0.10).

“We delivered another quarter of strong results, and we are raising 2021 guidance following an improvement in quarterly revenue generation. We have strong momentum going through the second half of the year, and we will be once again open to reassessing financial guidance at the end of the third quarter, “said Michael Goettler, CEO of Viatris.

Total revenue has increased above expectations ( +$180 million), and the company updated financial guidance for the 2021 fiscal year. For the full year, Viatris expects total revenue to be in a range between $17.5 billion – $17.9 billion, while the adjusted EBITDA should be between $6.15 billion to $6.45 billion.

Viatris also raised a free cash flow guidance to $2.4 billion, and it is important to mention that the company paid down $1.15 billion of debt during the first half of 2021. Viatris remains positioned to deliver long-term elevated growth, and the board of directors declared a quarterly dividend of eleven cents per share.

Last month, Viatris received approval from the U.S. Food and Drug Administration for the industry’s first-ever interchangeable biosimilar product in the U.S., Semglee, its insulin Glargine. Insulin drugs are among the most expensive medications, and according to estimates, Semglee could substitute Sanofi’s (NASDAQ: SNY) Lantus.

Fundamentally looking, Viatris trades at less than four times TTM EBITDA, and shares of this company could provide solid returns over the next few years. The company’s management remains very optimistic about the upcoming quarters in terms of growth, and with a market capitalization of $17 billion, Viatris is attractively valued.

Technical analysis: $14 represents a strong support level

Viatris shares have weakened more than 10% since the beginning of January 2021, and if the price falls again below $14 support, it would be a “sell” signal, and we have the open way to $13. On the other side, if the price jumps above $17, it would be a signal to trade shares, and the first target could be around $18.

Summary

Viatris reported its second-quarter results yesterday and further raised the outlook for the 2021 fiscal year. Viatris began the third quarter in a strong position, and shares of this company could provide solid returns over the next few years.