Does Viatris Offer Opportunity After 2.4% Weekly Gain and Industry Headwinds in 2025?

Wondering what to do with Viatris stock? You are definitely not alone. Lately, this pharmaceutical giant has given investors plenty to think about, and the conversation around its value just keeps picking up steam. Over the past week, Viatris shares moved up 2.4%, offering a glimmer of momentum after drifting lower in the previous months. But zooming out, performance has been a mixed bag: the stock is down 18.4% year-to-date and 6.1% over the last year, while still holding onto a 23.8% gain over three years, contrasted by a 21.3% slide across five.

Some of this volatility traces back to shifting expectations in the broader drug and healthcare sector. Evolving industry dynamics and recent market shifts have adjusted how investors gauge risk and reward, and Viatris, sitting at the center of these changes, is no stranger to those re-ratings. If you are scanning for clues on whether the stock is currently underappreciated or just facing tough odds, you are in the right place.

When it comes to valuation, the numbers stand out: by conventional checks, Viatris is undervalued in 5 out of 6 measures. That is a value score of 5. So, what does that really mean for you? Next, we will break down the popular valuation approaches, how Viatris stacks up, and tease out what might be an even better way to judge if the stock is worth a spot in your portfolio.

Why Viatris is lagging behind its peers

Approach 1: Viatris Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model focuses on estimating a company's intrinsic value by projecting its future cash flows and discounting them to today's value. Essentially, it asks: what are Viatris' expected cash flows worth in today’s dollars, given the risks and time value of money?

For Viatris, the most recent Free Cash Flow stands at approximately $1.64 billion. Analysts provide projections up to five years, with estimates extended beyond that by forecasting models. By 2029, Viatris' Free Cash Flow is projected to reach $2.49 billion, and extrapolated figures suggest continued growth through 2035. The model employs a "2 Stage Free Cash Flow to Equity" approach, reflecting both an initial projection period and a long-term growth phase.

On this basis, the DCF model calculates Viatris’ intrinsic value per share at $43.88, compared to the current market price. This implies the stock is trading at a significant 76.9% discount to its estimated true value. In other words, Viatris appears deeply undervalued based on projected cash flows.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Viatris.

Our Discounted Cash Flow (DCF) analysis suggests Viatris is undervalued by 76.9%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Viatris Price vs Sales

For companies in the pharmaceutical sector, the Price-to-Sales (P/S) ratio offers a valuable way to judge value, especially when profits can be affected by factors like research spending and one-time charges. The P/S ratio allows investors to gauge how much the market is willing to pay for each dollar of revenue, providing a clear view even when earnings are not consistently positive.

Growth prospects and risk levels shape what counts as a "normal" or "fair" P/S ratio. Faster-growing companies or those with lower perceived risk typically command a higher P/S, as investors are willing to pay for future sales growth. Conversely, higher risk or lower growth companies tend to trade at a discount.

Currently, Viatris’s P/S ratio stands at 0.84x, which is far beneath both the pharmaceutical industry average of 4.83x and the peer average of 3.11x. However, instead of relying solely on industry or peer averages, Simply Wall St offers a proprietary "Fair Ratio" for Viatris, calculated at 3.06x. This Fair Ratio is unique because it considers the company’s growth outlook, profit margins, risk profile, market cap, and industry specifics, providing a more nuanced benchmark than raw comparatives.

When comparing Viatris’s current 0.84x to its Fair Ratio of 3.06x, it is clear the stock trades well below what would be expected based on its underlying fundamentals and risks. This points to significant undervaluation using this measure.

Result: UNDERVALUED

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Viatris Narrative

Earlier we mentioned that there is an even better way to understand valuation. Let us introduce you to Narratives. Instead of relying solely on financial formulas and averages, Narratives are a way to connect the story you believe about a company, including your expectations for its future growth, risks, and earnings, with specific forecasts and a resulting fair value.

A Narrative helps you bring your perspective to life. You decide what trends or news matter most, input your own revenue or margin assumptions, and instantly see how this shapes Viatris’s estimated value. Narratives are simple and accessible right on Simply Wall St’s Community page, where millions of investors share their views and compare results, making it easy to see who’s bullish or bearish at a glance.

This approach helps you answer not just whether Viatris looks cheap by the numbers, but why, so you can make smarter, more informed buy or sell decisions as new information hits. For example, in the Community, some Viatris Narratives are highly optimistic, projecting fair values as high as $14 per share, while others are much more cautious, with targets closer to $8, reflecting different outlooks and risk assessments as events unfold.

Do you think there's more to the story for Viatris? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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