Is Viatris, Inc. overvalued or undervalued?

As of 9 May 2024, the valuation grade for Viatris, Inc. has moved from expensive to risky, indicating a shift in perception regarding its market valuation. The company appears to be overvalued, as evidenced by a P/E ratio of 38, which is significantly higher than the peer Walgreens Boots Alliance, Inc. at -14.12. Additionally, Viatris has an EV to EBITDA ratio of 6.47 and a Price to Book Value of 0.67, suggesting that its market price does not adequately reflect its underlying asset value.
In comparison to its peers, Viatris's valuation metrics indicate a concerning position, particularly with a return on equity (ROE) of only 1.75% and a return on capital employed (ROCE) of 2.82%. Furthermore, the company's stock has underperformed relative to the S&P 500 across multiple time frames, with a year-to-date return of -20.80% compared to the S&P 500's 12.22%. This trend reinforces the notion that Viatris is currently overvalued in the market.