Viatris Inc. (VTRS): Among the Oversold Stocks to Buy in 2025 Amid Inflation Fears
The stock market continues to face significant volatility, with major indices continuing their decline from last week. The S&P 500 is down nearly 2%, while the Nasdaq is equally struggling at over 2.5% in the red.
The implementation of new tariffs had already spooked the market. However, it was dealt an additional blow as the core Personal Consumption Expenditures index reading came in hotter than expected. Inflation and recession concerns are dominating the market, but this also presents an opportunity for outperformance.
Stocks that are oversold as a result of the current dip present a great opportunity for outperformance in 2025. We decided to come up with a list of such stocks.
To ensure that these stocks were suitable for a bear market, were it to persist, we also added an additional criterion of a strong dividend yield so that investors can accumulate dividends while they wait for a market turnaround. For this list, we only considered stocks with a market cap of at least $2 billion that are down considerably since the start of the year.
A healthcare worker in a lab coat, holding a microscope and reflecting on the diagnosis of a patient.
Viatris Inc. (NASDAQ:VTRS) is a healthcare company that operates in Greater China, Emerging Markets, Developed Markets, and JANZ segments. It provides generic drugs, biosimilars, prescription brand drugs, and complex generic drugs. The company's stock is experiencing a downturn, falling 26% this year.
Drug stocks are under pressure this year due to Donald Trump's criticism of companies operating from outside the US. While the US follows strict regulatory standards when it comes to drug manufacturing even outside the country, there is an over-reliance on other countries, which the US admin doesn't like, especially in the scenario where a war breaks out.
Apart from the above, Viatris (NASDAQ:VTRS) has business headwinds it needs to deal with. While Europe is expected to show strong growth in 2025, the same can't be said about North America, which continues to face pressure from competitors. It plans to continue its dividend policy and add $500 to $600 million in share buybacks, but investors need to see business improvements before they can take comfort in the payouts.
Overall, VTRS ranks 5th on our list of oversold stocks to buy in 2025 amid inflation fears. While we acknowledge the potential of VTRS as a leading investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is as promising as VTRS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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