Is Viatris, Inc. overvalued or undervalued?

As of 9 May 2024, Viatris, Inc. has moved from a valuation grade of very expensive to risky. The company is currently assessed as overvalued, given its P/E ratio of 38, which significantly exceeds the industry average, and an EV to EBITDA ratio of 6.47. Additionally, the company shows a low return on equity (ROE) of 1.75% and a return on capital employed (ROCE) of just 2.82%, indicating inefficiencies in generating returns relative to its capital.
In comparison to its peers, Viatris' P/E ratio is notably high compared to Incyte Corp., which has a P/E of 301.24, while Alnylam Pharmaceuticals, Inc. shows a negative P/E, indicating significant challenges. The valuation metrics suggest that Viatris is not only underperforming relative to its peers but also struggling to deliver value to shareholders, as evidenced by its negative year-to-date return of -28.92% compared to the S&P 500's positive return of 2.44%.