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Organon & Co. (OGN)
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Organon (OGN) AI Stock Analysis

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OGN

Organon

(NYSE:OGN)

Rating:50Neutral
Price Target:
$8.50
▼(-6.70% Downside)
Organon's overall stock score reflects significant financial challenges, including high leverage and declining revenue. However, the stock's low P/E ratio and high dividend yield suggest it may be undervalued. Positive developments in the earnings call and corporate events, such as the FDA approval for HADLIMA, provide some optimism. Technical indicators currently show bearish momentum, but oversold conditions could indicate potential for a rebound.
Positive Factors
Debt Management
The dividend cut frees up approximately $200 million per year in cash, which can be re-deployed towards debt repayment.
Product Performance
Organon's base business is performing reasonably well, and the new product launch Vtama has reported good sales figures.
Revenue Growth
Organon & Co. reiterated revenue guidance of $6.125 billion to $6.325 billion and expects low- to mid-single digit revenue growth post-2025.
Negative Factors
Dividend Strategy
Organon plans to cut its dividend by 90%, ending a nearly 2-year investor debate.
Financial Health
Updated financials include a $6 million charge reported in the first quarter, which could impact the company's financial health.
Market Position
The stock is positioned as a low growth story with an LOE overhang.

Organon (OGN) vs. SPDR S&P 500 ETF (SPY)

Organon Business Overview & Revenue Model

Company DescriptionOrganon & Co., a health care company, develops and delivers health solutions through a portfolio of prescription therapies in the United States and internationally. Its women's health portfolio comprises contraception and fertility brands, such as Nexplanon/Implanon, a long-acting reversible contraceptive. The company's biosimilars portfolio consists of three immunology products, such as Brenzys, Renflexis, and Hadlima, as well as two oncology products, including Ontruzant and Aybintio. It also offers cardiovascular products, consisting of several cholesterol-modifying medicines under the Zetia, Ezetrol, Vytorin, Inegy, Rosuzet, and Zocor brands; Cozaar and Hyzaar for the treatment of hypertension; respiratory products for various treatments to control and prevent symptoms caused by asthma under the Singulair, Dulera, Zenhale, and Asmanex brand names; and Singulair, Nasonex, Clarinex, and Aerius for treating seasonal allergic rhinitis. In addition, the company provides dermatology products under the Diprosone and Elocon brand; bone health portfolio, including Fosamax brand name; non-opioid pain management products under the Arcoxia, Diprospan, and Celestone brand names; Proscar for the treatment of symptomatic benign prostatic hyperplasia; and Propecia for the treatment of male pattern hair loss. The company sells its products primarily to drug wholesalers and retailers, hospitals, and government agencies, as well as managed health care providers, such as health maintenance organizations, pharmacy benefit managers, and other institutions. Organon & Co. was incorporated in 2020 and is based in Jersey City, New Jersey.
How the Company Makes MoneyOrganon makes money through the sale of its healthcare products and solutions across its three main business segments. In Women's Health, revenue is generated from contraceptives, fertility solutions, and hormone therapies. The Biosimilars segment contributes to earnings through the development and commercialization of biologic medicines that are highly similar to already approved reference products, offering cost-effective alternatives. The Established Brands segment, which consists of a wide range of legacy pharmaceutical products, provides a stable revenue stream as these products continue to be used in various therapeutic areas. Additionally, Organon engages in strategic partnerships and collaborations to enhance its product offerings and expand market reach, further contributing to its revenue.

Organon Earnings Call Summary

Earnings Call Date:Aug 05, 2025
(Q2-2025)
|
% Change Since: -5.79%|
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Neutral
The earnings call depicted a company with strong financial discipline and growth in key segments like Women's Health and Biosimilars. Despite challenges like the loss of exclusivity for Atozet and funding issues affecting Nexplanon sales, Organon showed resilience through debt repayment and strategic investments, suggesting a stable outlook.
Q2-2025 Updates
Positive Updates
Revenue and EBITDA Performance
Revenue for the second quarter was $1.6 billion, down 1% at constant currency, with notable contributions from new assets. Adjusted EBITDA was $522 million with a 32.7% margin, setting strong year-to-date performance.
Debt Repayment Milestone
Organon repaid approximately $350 million of principal on long-term debt instruments in Q2, setting a path to achieving net leverage below 4x by year-end.
Women's Health and Fertility Business Growth
The Women's Health franchise grew 2% at constant currency, and the fertility business saw a 15% increase driven by increased demand and favorable comparisons.
Biosimilars Segment Success
Biosimilars outperformed expectations, with Hadlima generating almost $100 million by June, up 68% compared to the prior year period.
Vtama Revenue Growth
Vtama revenue was $31 million, up 35% sequentially and 70% year-over-year, showing strong performance among peer set.
Negative Updates
Atozet Loss of Exclusivity in EU
The loss of exclusivity of Atozet in the EU impacted revenue, contributing to a $60 million decline for the quarter.
Nexplanon U.S. Sales Decline
Nexplanon sales declined 1% at constant currency, with a 5% revenue decline in the U.S. due to constrained funding for contraceptive products.
General Medicines Base Business Risk
Conservatism was applied to volume growth due to risks in the General Medicines base business, particularly in the respiratory portfolio.
Company Guidance
During the Organon Second Quarter 2025 Earnings Call, the company provided updated guidance and insights into its financial performance and strategic initiatives. Organon reported a second-quarter revenue of $1.6 billion, down 1% at constant currency, and raised its full-year revenue guidance by $100 million at the midpoint. The company achieved an adjusted EBITDA of $522 million, representing a 32.7% margin, and affirmed its adjusted EBITDA margin guidance range of 31% to 32%. Organon highlighted its commitment to reducing its debt burden, having repaid approximately $350 million of principal on long-term debt in the second quarter, and aims to achieve a net leverage ratio below 4x by year-end, with a goal of 3.5x or below by the end of 2026. The Women's Health franchise grew 2% at constant currency, with fertility business growth of 15% and Jada's double-digit growth. However, Nexplanon sales declined 1% at constant currency, attributed to federal funding headwinds in the U.S., despite a 10% growth outside the U.S. Organon remains committed to building Nexplanon into a $1 billion franchise. The General Medicines segment, including biosimilars like Hadlima, showed promising growth, with Hadlima's revenues up 68% year-over-year. Vtama's revenue increased by 70% year-over-year to $31 million, with over 20,000 new prescribers added since its launch. Organon also announced a revised full-year revenue guidance, attributing the adjustment to favorable foreign exchange trends and operational performance.

Organon Financial Statement Overview

Summary
Organon faces declining revenues and high leverage, but maintains strong profitability margins and efficient cash flow generation. High debt levels pose a financial risk.
Income Statement
65
Positive
Organon's income statement shows a declining revenue trend from $8.09B in 2020 to $4.78B TTM (Trailing-Twelve-Months) in 2025, indicating a challenging revenue environment. The gross profit margin for TTM is strong at approximately 57.7%, but net profit margin has decreased to about 13.9%. EBIT and EBITDA margins remain healthy at 22.4% and 24.6%, respectively, though there is a noticeable decline in absolute profitability over recent years.
Balance Sheet
40
Negative
The balance sheet reveals a high debt-to-equity ratio, which is typical for the industry but risky, with total debt significantly exceeding equity. The stockholders' equity is notably low, impacting the equity ratio negatively. Return on equity cannot be reliably calculated due to historical negative equity figures, posing concerns about financial stability and risk exposure.
Cash Flow
70
Positive
Organon's cash flow statement highlights a volatile but generally positive free cash flow, with a TTM free cash flow of $608M. The operating cash flow to net income ratio is robust, indicating efficient cash generation relative to net income. However, fluctuations in free cash flow growth and high capital expenditures require careful monitoring.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue4.69B6.40B6.26B6.17B6.30B8.10B
Gross Profit2.66B3.71B3.75B3.88B3.92B4.75B
EBITDA1.07B1.61B1.44B1.69B1.81B2.99B
Net Income555.14M864.00M1.02B917.00M1.35B2.16B
Balance Sheet
Total Assets13.50M13.10B12.06B10.96B10.68B10.43B
Cash, Cash Equivalents and Short-Term Investments599.00K675.00M693.00M706.00M737.00M500.00M
Total Debt8.90M8.88B8.76B8.91B9.13B31.00M
Total Liabilities12.77M12.63B12.13B11.85B12.19B11.25B
Stockholders Equity733.00K472.00M-70.00M-892.00M-1.51B-820.00M
Cash Flow
Free Cash Flow323.22M588.00M538.00M431.00M1.97B1.91B
Operating Cash Flow531.29M939.00M799.00M858.00M2.46B2.19B
Investing Cash Flow-371.21M-513.00M-260.00M-420.00M-481.00M-258.00M
Financing Cash Flow-160.30M-368.00M-569.00M-433.00M-1.33B-2.17B

Organon Technical Analysis

Technical Analysis Sentiment
Negative
Last Price9.11
Price Trends
50DMA
9.74
Negative
100DMA
10.68
Negative
200DMA
12.99
Negative
Market Momentum
MACD
-0.19
Positive
RSI
42.09
Neutral
STOCH
19.61
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OGN, the sentiment is Negative. The current price of 9.11 is below the 20-day moving average (MA) of 9.66, below the 50-day MA of 9.74, and below the 200-day MA of 12.99, indicating a bearish trend. The MACD of -0.19 indicates Positive momentum. The RSI at 42.09 is Neutral, neither overbought nor oversold. The STOCH value of 19.61 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for OGN.

Organon Risk Analysis

Organon disclosed 43 risk factors in its most recent earnings report. Organon reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Organon Peers Comparison

Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
81
Outperform
$140.71B13.1612.16%7.06%14.72%
74
Outperform
$74.43B16.9223.04%4.27%3.46%-13.29%
73
Outperform
$116.61B11.908.39%4.66%-9.32%120.62%
71
Outperform
$9.05B22.215.41%10.05%98.22%
67
Neutral
$93.32B18.5029.31%5.42%2.57%
51
Neutral
$7.39B0.36-62.86%2.36%15.48%-2.68%
50
Neutral
$2.27B3.24159.64%9.44%-1.02%-30.57%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
OGN
Organon
9.11
-9.46
-50.94%
BMY
Bristol Myers
45.36
0.62
1.39%
GSK
GlaxoSmithKline
37.58
-0.79
-2.06%
GRFS
Grifols SA
10.65
3.27
44.31%
PFE
Pfizer
24.23
-2.64
-9.83%
SNY
Sanofi
47.43
-3.07
-6.08%

Organon Corporate Events

Business Operations and StrategyFinancial Disclosures
Organon Reports Q2 2025 Financial Results and Guidance
Neutral
Aug 5, 2025

Organon reported its financial results for the second quarter of 2025, with a revenue of $1.594 billion, a slight decrease from the previous year. The company achieved a net income of $145 million and repaid $345 million of long-term debt, aiming for a net debt to Adjusted EBITDA ratio of less than 4.0x by year-end. Organon raised its full-year revenue guidance to between $6.275 billion and $6.375 billion, while maintaining its Adjusted EBITDA margin guidance. The quarter saw growth in women’s health and biosimilars, offset by declines in established brands due to the loss of exclusivity in key markets.

The most recent analyst rating on (OGN) stock is a Sell with a $20.00 price target. To see the full list of analyst forecasts on Organon stock, see the OGN Stock Forecast page.

Executive/Board ChangesShareholder Meetings
Organon Concludes Annual Meeting with Key Decisions
Neutral
Jun 12, 2025

On June 10, 2025, Organon held its Annual Meeting where stockholders voted on five proposals. The meeting saw approximately 83% of shares represented, with key decisions including the election of eleven directors, approval of executive compensation, amendment of the 2021 Incentive Stock Plan, ratification of PricewaterhouseCoopers LLP as the accounting firm, and rejection of a stockholder proposal for a new Director Election Resignation Guideline.

The most recent analyst rating on (OGN) stock is a Sell with a $20.00 price target. To see the full list of analyst forecasts on Organon stock, see the OGN Stock Forecast page.

Product-Related AnnouncementsRegulatory Filings and Compliance
Organon Receives FDA Interchangeability for HADLIMA
Positive
May 27, 2025

On May 27, 2025, Organon & Co. announced that the U.S. Food and Drug Administration (FDA) granted interchangeability designation to their product HADLIMA™ (adalimumab-bwwd) as a biosimilar to Humira®. This designation allows pharmacists to substitute HADLIMA for Humira without consulting prescribers, potentially increasing patient access and reducing costs. The designation is based on studies demonstrating comparable pharmacokinetics, efficacy, safety, and immunogenicity with Humira. Organon emphasizes that this approval could lead to significant savings for patients and the healthcare system.

The most recent analyst rating on (OGN) stock is a Sell with a $20.00 price target. To see the full list of analyst forecasts on Organon stock, see the OGN Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 06, 2025