Organon price target lowered to $18 from $24 at Piper Sandler

Piper Sandler analyst David Amsellem lowered the firm’s price target on Organon (OGN) to $18 from $24 and keeps an Overweight rating on the shares after hosting an investor luncheon with Organon senior management. The firm says that not surprisingly, a key topic of discussion was the dividend cut and focus on accelerating deleveraging. Piper notes that “it is certainly not lost on us” that Organon’s shares have taken its lumps in the wake of the decision, and beyond that, the shares are down about 57% since the company announced the acquisition of Dermavant last September. Investors are clearly unhappy. The firm’s take is a bit different. Specifically, wrestling net debt/EBITDA down to the 3-times, coupled with driving visibility into long-term EBITDA stability at a minimum gives the company the best shot at sustaining a richer multiple, it argues.