Generic drug manufacturer Viatris (VTRS) started a dividend on Monday, but VTRS ‘shares plummeted after the company released a negative forecast for 2021.
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For the full year, Viatris expects sales of $ 17.2 billion to $ 17.8 billion. This was well below the analysts’ average estimate of $ 18.4 billion, said Ami Fadia, an analyst at SVB Leerink, in a report to clients.
Viatris also asked for $ 6 billion to $ 6.4 billion in adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, and expects free cash flow to reach $ 2 billion to $ 2, 3 billion. Both measures lost analysts’ forecasts of $ 7.2 billion and $ 3.8 billion, respectively.
The loss of profits and cash flow probably disappointed investors in VTRS shares, said Fadia.
“We believe that the magnitude of the loss, particularly in EBITDA and (free cash flow), has not been anticipated and we expect the shares to be traded downwards today,” she said.
VTRS stock plummets on orientation failure
In the morning trading on the stock market today, VTRS shares fell 11.3% close to 16.20. This put stocks at their lowest point since November.
Viatris is the combination of Mylan, a manufacturer of generic drugs and EpiPen emergency allergic reaction injection, and Pfizer(PFE) oldest drug business called Upjohn. Analysts anticipated the guidance, Viatris’ first outlook after the merger.
Viatris Chief Executive Michael Goettler called 2021 the company’s “bad year”.
“We are confident that our financial guidance for 2021 is the right starting point for Viatris and we continue to expect 2021 to be our year of low revenue, adjusted EBITDA and free cash flow, reflecting a balanced view of the winds. favorable short-term and headwinds, especially due to the delay in closing the combination between the Mylan and Pfizer’s Upjohn businesses, “he said in a written statement.
Generic drug maker starts dividend
More optimistic for investors in VTRS shares, the company announced an annualized dividend of 44 cents. Due to the timing of the dividend start, the company expects to make three payments in 2021, totaling $ 400 million. She plans to declare the first payment of 11 cents in May and pay it in June.
Check out the best dividend stocks.
Still, VTRS ‘shares plummeted with the news. The stock fell below the bottom line of a flat base with a buying point of 18.96, according to MarketSmith.com.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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