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Strategies & Market Trends : Value Investing

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To: S. maltophilia who wrote (69168)	11/21/2021 8:33:04 AM
From: Spekulatius	2 Recommendations Recommended By Area51 E_K_S of 78899

VTRS - I own it and I agree it could be a melting icecube or value trap. I think the merger with Upjohn has changed the company for the better. coming of the merger and the subsequent spin-off, the projections were too high and the revenue and EBITDA reset caused painfull re-rating but then they beat the lowered projections for two quarters and yet stock has been stuck in the muck. They will generate ~$2.5B in FCF which will be used to lay down the still plentiful debt ~$20B and a small dividend. By mid 2022, they should hit the 2.5x EBITDA target payed out at the spin. At that point, they should be able increase the dividend and do some buybacks in addition to more debt reduction. When you calculate it out - a $2.5B FCF for a $16B market cap is a 15% yield on equity. They pay ~$800M on interest which is 4%. That number will come down significantly, because VTRS is investment grade ( BBB-] sec.gov investor.viatris.com The investor event on January 7 may provide more clarity on the near term outlook.

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