Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Viatris Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 2.3% to -5.4% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 90, DPO 47, DIO 140). At a 6.0% WACC with mid-year discounting, the terminal value (82% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 15.9x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $2.05 per share, suggesting VTRS is overvalued by 84.7% at the current price of $13.39.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2026 | 2027 | 2028 | 2029 | 2030 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | 148 | 151 | 154 | 152 | 144 | 147 |
| (−) Net Interest | 525 | 534 | 543 | 537 | 508 | 521 |
| (+) D&A | 436 | 414 | 399 | 387 | 405 | 415 |
| EBITDA | 1,109 | 1,100 | 1,096 | 1,076 | 1,056 | 1,083 |
| (−) Tax | 74 | 75 | 76 | 75 | 71 | — |
| (−) CapEx | 403 | 411 | 418 | 413 | 391 | — |
| (−) ΔWC | -107 | 110 | 102 | -71 | -331 | — |
| Free Cash Flow (FCF) | 739 | 504 | 500 | 659 | 926 | — |
| Peers' EBITDA Multiple | 15.9x | |||||
| Terminal Value | 17,248 | |||||
| WACC / Discount Rate | 5.99% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 718 | 462 | 432 | 538 | 713 | 12,896 |
| Enterprise Value | 15,759 | |||||
| Projection Period | 2,862 | 18.2% | ||||
| Terminal Value | 12,896 | 81.8% | ||||
| (−) Current Net Debt | 13,353 | |||||
| Equity Value | 2,405 | |||||
| (÷) Outstanding Shares | 1171M | |||||
| Fair Price | $2 | -84.7% | ||||
| WACC \ EV/EBITDA Exit Multiple | 11.9x | 13.9x | 15.9x | 17.9x | 19.9x |
|---|---|---|---|---|---|
| 4.0% | $0 | $2 | $3 | $5 | $6 |
| 5.0% | $0 | $1 | $3 | $4 | $6 |
| 6.0% | $0 | $1 | $2 | $3 | $5 |
| 7.0% | $0 | $0 | $1 | $3 | $4 |
| 8.0% | $0 | $0 | $1 | $2 | $3 |
Current price: $13.39. Green = undervalued, Red = overvalued.
Based on default parameters
This is an unlevered Free Cash Flow to Firm (FCFF) model with a 5-year projection period. Revenue, expenses, D&A, and working capital are projected using the same line-by-line approach as the Growth Exit models. The key difference is the terminal value methodology: instead of assuming perpetual cash flow growth, the terminal value is calculated by applying the industry peer median EV/EBITDA multiple to the projected Year 6 EBITDA.
Using a peer exit multiple anchors the terminal value to how the market currently prices comparable companies, rather than relying on a theoretical perpetual growth assumption. This approach captures relative valuation dynamics and is particularly useful when a company is expected to converge toward industry-average profitability over time. The sensitivity matrix shows how fair value changes across different WACC and EV/EBITDA multiple scenarios.