Analyst Note| Soo Romanoff |
The newly formed management team of the recently announced combination of Mylan and Upjohn, Viatris, launched its first investor call to revise guidance lower. The call was presented to establish a baseline, but the various moving parts, including lower fiscal 2021 expectations before reporting normalized fourth-quarter 2020 results and its investor day both next week gave us pause. The interesting timing of guidance was likely to let off some pressure ahead of the events next week and management’s interest to de-emphasize the deeper trough of the business, fiscal 2020, while possibly attempting to turn attention to its longer-term prospects. We view this attempted pivot to be a tough sell when granular pipeline or restructuring details are not shared. We will take a closer look at our projections but do not anticipate a material change to our fair value estimate of $25 or no-moat rating at this time.