Episode Details

Viatris Inc. (VTRS) Q2 2026 — Q2 2026 (3 months ended June 30, 2026): revenue $3,756.8M, UP 5% reported and 3.5% operationally, vs a $3,675.4M consensus - a 2.2% BEAT. Adjusted diluted EPS $0.69 vs a $0.601 bar - a 14.8% BEAT (U.S. GAAP was a LOSS of $0.10 on a $118.8M net loss, driven by a $177.8M non-cash Tyrvaya write-down). Adjusted EBITDA $1,188.3M, UP 10%. Every 2026 guidance midpoint RAISED. The 8-K was accepted 7:56am ET, BEFORE the open: the stock opened UP at $18.15, hit a 52-week intraday high of $18.39, then closed $16.29 - down 7.71% on the day and 11.42% from its own high. Viatris beat on revenue, beat adjusted EPS by 14.8%, and raised every single 2026 guidance midpoint. The stock opened at a fresh 52-week high and closed 11% below it. The reason is where the growth came from. On the company's own constant-currency basis, first-half net sales grew 3%. Apply each segment's own operational rate to its own prior-year base and Greater China - 19% of net sales - contributed about 89% of that growth. Strip China out and the other 81% of Viatris grew four-tenths of one percent. And on the call, management guided Greater China down to low-double-digit growth for the year because of a new Chinese public-hospital procurement policy, Developed Markets to roughly flat with North America declining, and JANZ to a low-single-digit decline. Three of four regions flat or shrinking, and the one engine slowing into a reform nobody can size until November. THE CALL: SELL (3/5, FAIR VALUE $12.75 vs THE $16.43 CLOSE - 22% BELOW THE PRICE AND 34% BELOW WALL STREET) — base-case value ~$12.75 vs ~$16.43 today. KEY METRICS: - CALL: SELL 3/5, fair value $12.75 vs the $16.43 Aug 7 close = 22.4% downside. Bull $19, bear $8. Buy under $10.50. EV $30.80B = 7.0x guided 2026 adjusted EBITDA of $4.40B, or 8.1x charging the ~$600M of cash restructuring, and 6.5x guided adjusted EPS of $2.52. - Street: Hold. 13 analysts, 4 buy / 8 hold / 1 sell, screener target ~$19.25 in an $18-$22 range - UNDATED, we could not verify one post-print revision. We are 34% BELOW them. What to watch: UP: a genuine double beat - revenue 2.2% ahead, adjusted EPS 14.8% ahead - with every 2026 guidance midpoint RAISED (revenue $14.75B, adjusted EBITDA $4.40B, adjusted EPS $2.52); we tested whether the raise was only the beat and it was FALSE - implied H2 adjusted EPS went from $1.12 to $1.24, a real raise while absorbing $100-150M of Nashik disruption; adjusted EBITDA +10%, adjusted gross margin +90bps to 57.5%; Greater China +17% operationally; ~$550M returned including ~$270M of buybacks at a $16.42 average; an 8.4% FCF yield; and Phase 3 readouts for selatogrel and cenerimod in 1H 2027. DOWN: strip Greater China and the other 81% of Viatris grew 0.4% in constant currency; management guides three of four regions flat or shrinking and China down to low-double-digit into a hospital procurement reform with no clarity until November; H1 free cash flow grew 2.7%, not 97%; the 2.9x leverage headline is 3.41x charging the ~$600M of cash restructuring; new product revenue is only $172M of a $450-550M target that was HELD; and Nashik is an open FDA matter after a February fire and May Form 483 observations. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.