Fitch Ratings affirmed Viatris Inc.'s Long- and Short-Term Issuer Default Ratings (IDRs) at 'BBB' and 'F2', respectively, but revised the Rating Outlook to Negative from Stable. This change reflects anticipated weaker financial performance for the company.
The negative outlook is driven by expectations of reduced revenue, EBITDA, and cash flow. Fitch noted that this could be exacerbated by potential tariff and trade restrictions with Europe, drug price controls, currency headwinds, and evolving FDA regulatory risks.
Fitch estimates Viatris's 2025 EBITDA at approximately $3.8 billion, which, on an unchanged debt level, would result in an EBITDA leverage of about 3.5x. The rating agency will closely monitor Viatris's strategies to enhance revenue and EBITDA performance and their impact on leverage.
The report also highlighted that Viatris's focus on prioritizing free cash flow for shareholder returns might conflict with maintaining EBITDA leverage below 3.5x, a key sensitivity for its credit rating. This revision signals increased credit risk and could influence the company's future financing activities.
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