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OGN

Organon NYSE:OGN Stock Report

Last Price

US$24.51

Market Cap

US$6.2b

7D

-8.5%

1Y

-27.9%

Updated

28 Sep, 2022

Data

Company Financials +
OGN fundamental analysis
Snowflake Score
Valuation6/6
Future Growth2/6
Past Performance1/6
Financial Health1/6
Dividends3/6

OGN Stock Overview

Organon & Co., a health care company, develops and delivers health solutions through a portfolio of prescription therapies in the United States and internationally.

Organon Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Organon
Historical stock prices
Current Share PriceUS$24.51
52 Week HighUS$39.48
52 Week LowUS$24.16
Beta0
1 Month Change-16.49%
3 Month Change-27.38%
1 Year Change-27.87%
3 Year Changen/a
5 Year Changen/a
Change since IPO-26.29%

Recent News & Updates

Aug 31

Organon: What Is The Recipe?

Summary Organon has seen a real struggle in its first year on its own as a publicly listed business. Lack of growth was anticipated, yet the extent of margin pressure has been unexpected. With net debt flattish, leverage ratios have only increased, creating few triggers in the near-term horizon. A year ago, I concluded that there were fertile grounds for shares of Organon & Co. (OGN) in this premium article. The spinoff from Merck & Co., Inc. (MRK) has seen some volatile trading after its separation, and with shares lagging a bit, that looked rather interesting. Since shares started trading on their own early last summer, shares showed some volatility in a $28-$38 trading range in the first months after trading, and trading towards the lower end of that range at the time, I found the valuation enticing. A Recap The spinoff of Organon within Merck has been well-prepared as the spinoff procedure started early in 2020, allowing the company to operate separately under the ownership of Merck ahead of the official spinoff. Organon generated $6.6 billion in sales in 2020 from women's health, including unintended pregnancies, treatment of women with peri- and postmenopausal symptoms, uterine fibroid, etc. The business is organized out of two segments of which "established brands" is the largest segment with 49 products together being responsible for $4.5 billion in sales. The women's health business generated $1.6 billion in sales from 10 products, including some biosimilars. The business is a truly international, or better said, global cash cow. Some 80% of sales are generated abroad, as the company reports adjusted EBITDA of $2.8 billion, translating into very fat margins. While there are some exclusivity issues and concerns, the counterargument is that the line-up of products is quite broad, with real diversification seen as no individual product is responsible for more than 10% of sales. Nonetheless, not all was great as the company guided for 2021 sales to fall from $6.6 billion in 2020 to $6.1-$6.4 billion in 2021. Based on $2.8 billion in EBITDA, I pegged after-tax cash flows around $1.6 billion after deducting $200-$300 million in capital investments, $400 million in interest costs and a 25% tax rate. Such a number would work down to earnings of $6.50 per share based on roughly a quarter of a billion shares outstanding. With shares trading at $33, that worked down to just 5 times earnings, albeit that the fall in sales and leverage were the counterarguments. Leverage was a real big argument, with net debt posted at $8.6 billion at the time, actually exceeding its $8.3 billion equity valuation at the time, albeit that leverage was manageable at 3.1 times EBITDA, albeit that EBITDA was likely seen around $2.5 billion in 2021, increasing leverage ratios to 3.5 times. Weighing it all together, I thought that the value argument was prevailing as I have initiated a position, and after shares have hit a high around $40 earlier this year, shares are now back to $28 per share and change. What Happened? In November of last year, the company announced a deal to acquire Forendo Pharma in a deal valued at just $75 million upfront, albeit that regulatory and commercial achievements could drive up the value of the deal to nearly a billion. In February, full year sales were reported at $6.3 billion and while sales were down just 3%, adjusted EBITDA margins fell 10 percentage points to 38%, coming in just below $2.4 billion. This translates into adjusted earnings of $6.54 per share and GAAP earnings of $5.31 per share, with many reconciliation items looking quite fair, as net debt was quite stable at $8.4 billion. The company guided for flattish sales at $6.1-$6.4 billion in 2022, pretty flat year-over-year, yet adjusted EBITDA margins are seen around 35%, as this reveals further margin pressure and EBITDA to come in just below $2.2 billion. This results in a pre-tax earnings headwind of around $0.80 per share, but earnings should still come in around $6 per share on an adjusted basis, all while leverage ratio increases on a relative basis.

Aug 24

Oragenics announces early toxicology data for intranasal COVID-19 vaccine

Development-stage biotech Oragenics, Inc. (NYSE:OGN) announced initial data on Wednesday from an ongoing Good Laboratory Practice (GLP) toxicology study for NT-CoV2-1, an intranasal COVID-19 vaccine candidate. The data, generated from a rabbit model, indicate a safety profile and immune responses for NT-CoV2-1, the company said, adding that the readout is expected to support regulatory filings required to advance the candidate in a Phase 1 trial. The final toxicology report, which will include data from ongoing histopathology evaluation, is expected by the year-end. The company plans to start the Phase 1 trial for NT-CoV2-1 by early 2023. “We believe our intranasal vaccine candidate will have the potential to reduce transmission and offers a needle-free COVID-19 vaccine option,” OGN’s Chief Executive Kimberly Murphy said. A former executive at GSK (GSK), Murphy took the leadership of OGN in June.

Aug 17

Organon, Samsung Bioepis Humira biosimilar Hadlima high concentration dosage gets FDA nod

The U.S. Food and Drug Administration (FDA) approved a citrate-free, high-concentration (100 mg/mL) formulation of Samsung Bioepis and Organon's (NYSE:OGN) Hadlima, a biosimilar to AbbVie's (ABBV) blockbuster arthritis/psoriasis therapy Humira (adalimumab). The companies said Hadlima (adalimumab-bwwd) will be available in pre-filled syringe and autoinjector options. Hadlima was previously approved by the FDA as a low-concentration (50 mg/mL) formulation in July 2019, the companies noted in an Aug. 17 press release. Organon expects to launch Hadlima in the U.S. on or after July 1, in 2023. Novartis' too has a Humira biosimilar Hyrimoz, whose high concentration formulation of 100 mg/mL is under review by the FDA.

Aug 07
Organon (NYSE:OGN) Is Due To Pay A Dividend Of $0.28

Organon (NYSE:OGN) Is Due To Pay A Dividend Of $0.28

The board of Organon & Co. ( NYSE:OGN ) has announced that it will pay a dividend on the 15th of September, with...

Shareholder Returns

OGNUS PharmaceuticalsUS Market
7D-8.5%3.7%-2.0%
1Y-27.9%5.3%-20.3%

Return vs Industry: OGN underperformed the US Pharmaceuticals industry which returned 4.2% over the past year.

Return vs Market: OGN underperformed the US Market which returned -22.1% over the past year.

Price Volatility

Is OGN's price volatile compared to industry and market?
OGN volatility
OGN Average Weekly Movement3.2%
Pharmaceuticals Industry Average Movement11.5%
Market Average Movement6.9%
10% most volatile stocks in US Market15.8%
10% least volatile stocks in US Market2.8%

Stable Share Price: OGN is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: OGN's weekly volatility (3%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
20209,300Kevin Alihttps://www.organon.com

Organon & 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.

Organon Fundamentals Summary

How do Organon's earnings and revenue compare to its market cap?
OGN fundamental statistics
Market CapUS$6.23b
Earnings (TTM)US$1.11b
Revenue (TTM)US$6.36b

5.6x

P/E Ratio

1.0x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
OGN income statement (TTM)
RevenueUS$6.36b
Cost of RevenueUS$2.35b
Gross ProfitUS$4.01b
Other ExpensesUS$2.90b
EarningsUS$1.11b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)4.35
Gross Margin63.02%
Net Profit Margin17.42%
Debt/Equity Ratio-782.1%

How did OGN perform over the long term?

See historical performance and comparison

Dividends

4.6%

Current Dividend Yield

26%

Payout Ratio
We’ve recently updated our valuation analysis.

Valuation

Is OGN undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

6/6

Valuation Score 6/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for OGN?

Other financial metrics that can be useful for relative valuation.

OGN key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue2.3x
Enterprise Value/EBITDA7.1x
PEG Ratio1.2x

Price to Earnings Ratio vs Peers

How does OGN's PE Ratio compare to its peers?

OGN PE Ratio vs Peers
The above table shows the PE ratio for OGN vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average32.2x
VTRS Viatris
13.9x18.0%US$10.6b
CTLT Catalent
27.3x13.0%US$13.7b
CORT Corcept Therapeutics
24.7x29.7%US$2.8b
BHC Bausch Health Companies
62.7x164.1%US$2.7b
OGN Organon
5.6x4.8%US$6.2b

Price-To-Earnings vs Peers: OGN is good value based on its Price-To-Earnings Ratio (5.6x) compared to the peer average (32.2x).


Price to Earnings Ratio vs Industry

How does OGN's PE Ratio compare vs other companies in the US Pharmaceuticals Industry?

Price-To-Earnings vs Industry: OGN is good value based on its Price-To-Earnings Ratio (5.6x) compared to the US Pharmaceuticals industry average (12.6x)


Price to Earnings Ratio vs Fair Ratio

What is OGN's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

OGN PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio5.6x
Fair PE Ratio20.1x

Price-To-Earnings vs Fair Ratio: OGN is good value based on its Price-To-Earnings Ratio (5.6x) compared to the estimated Fair Price-To-Earnings Ratio (20.1x).


Share Price vs Fair Value

What is the Fair Price of OGN when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: OGN ($24.51) is trading below our estimate of fair value ($141.32)

Significantly Below Fair Value: OGN is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.


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Future Growth

How is Organon forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


4.8%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: OGN's forecast earnings growth (4.8% per year) is above the savings rate (1.9%).

Earnings vs Market: OGN's earnings (4.8% per year) are forecast to grow slower than the US market (14.8% per year).

High Growth Earnings: OGN's earnings are forecast to grow, but not significantly.

Revenue vs Market: OGN's revenue (1.3% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: OGN's revenue (1.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: OGN's Return on Equity is forecast to be very high in 3 years time (213.7%).


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Past Performance

How has Organon performed over the past 5 years?

Past Performance Score

1/6

Past Performance Score 1/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


-12.6%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: OGN has high quality earnings.

Growing Profit Margin: OGN's current net profit margins (17.4%) are lower than last year (27.8%).


Past Earnings Growth Analysis

Earnings Trend: OGN's earnings have declined by 12.6% per year over the past 5 years.

Accelerating Growth: OGN's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: OGN had negative earnings growth (-37.2%) over the past year, making it difficult to compare to the Pharmaceuticals industry average (5%).


Return on Equity

High ROE: OGN's liabilities exceed its assets, so it is difficult to calculate its Return on Equity.


Discover strong past performing companies

Financial Health

How is Organon's financial position?

Financial Health Score

1/6

Financial Health Score 1/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: OGN has negative shareholder equity, which is a more serious situation than short term assets not covering short term liabilities.

Long Term Liabilities: OGN has negative shareholder equity, which is a more serious situation than short term assets not covering long term liabilities.


Debt to Equity History and Analysis

Debt Level: OGN has negative shareholder equity, which is a more serious situation than a high debt level.

Reducing Debt: OGN's has negative shareholder equity, so we do not need to check if its debt has reduced over time.

Debt Coverage: OGN's debt is not well covered by operating cash flow (7.7%).

Interest Coverage: OGN's interest payments on its debt are well covered by EBIT (4.7x coverage).


Balance Sheet


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Dividend

What is Organon current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


4.57%

Current Dividend Yield

Dividend Yield vs Market

Organon Dividend Yield vs Market
How does Organon dividend yield compare to the market?
SegmentDividend Yield
Company (Organon)4.6%
Market Bottom 25% (US)1.6%
Market Top 25% (US)4.6%
Industry Average (Pharmaceuticals)2.5%
Analyst forecast in 3 Years (Organon)4.8%

Notable Dividend: OGN's dividend (4.57%) is higher than the bottom 25% of dividend payers in the US market (1.67%).

High Dividend: OGN's dividend (4.57%) is low compared to the top 25% of dividend payers in the US market (4.69%).


Stability and Growth of Payments

Stable Dividend: Too early to tell whether OGN's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if OGN's dividend payments are increasing as they only just started paying a dividend.


Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (25.7%), OGN's dividend payments are well covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: At its current cash payout ratio (83%), OGN's dividend payments are covered by cash flows.


Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

1.3yrs

Average management tenure


CEO

Kevin Ali (62 yo)

1.25yrs

Tenure

US$16,787,623

Compensation

Mr. Kevin Ali is Chief Executive Officer and Director of Organon & Co. since June 2, 2021. Mr. Ali served as the President of Global Enterprise Portfolio Strategy at Merck & Co., Inc. from 2019 to 2021 and...


CEO Compensation Analysis

Kevin Ali's Compensation vs Organon Earnings
How has Kevin Ali's remuneration changed compared to Organon's earnings?
DateTotal Comp.SalaryCompany Earnings
Jun 30 2022n/an/a

US$1b

Mar 31 2022n/an/a

US$1b

Dec 31 2021US$17mUS$1m

US$1b

Compensation vs Market: Kevin's total compensation ($USD16.79M) is above average for companies of similar size in the US market ($USD8.63M).

Compensation vs Earnings: Insufficient data to compare Kevin's compensation with company performance.


Leadership Team

Experienced Management: OGN's management team is not considered experienced ( 1.3 years average tenure), which suggests a new team.


Board Members

Experienced Board: OGN's board of directors are not considered experienced ( 1.3 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

What is the ownership structure of OGN?
Owner TypeNumber of SharesOwnership Percentage
State or Government107,5000.04%
Individual Insiders144,3580.06%
General Public54,611,79021.5%
Institutions199,466,20578.4%

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Top 25 shareholders own 55.99% of the company
OwnershipNameSharesCurrent ValueChange %Portfolio %
11.68%
The Vanguard Group, Inc.
29,694,098$727.8m1.84%0.02%
6.49%
BlackRock, Inc.
16,506,196$404.6m-2.21%0.01%
5.09%
State Street Global Advisors, Inc.
12,955,993$317.6m8.34%0.02%
4.66%
Janus Henderson Group plc
11,861,867$290.7m4.46%0.17%
4.27%
Mawer Investment Management Ltd.
10,848,522$265.9m30.78%0.77%
3.37%
Lord, Abbett & Co. LLC
8,576,439$210.2m5.95%0.8%
3.23%
BNY Mellon Asset Management
8,203,277$201.1m-2.21%0.05%
2.96%
Massachusetts Financial Services Company
7,530,270$184.6m16.2%0.05%
2.03%
Geode Capital Management, LLC
5,167,808$126.7m-6.62%0.02%
1.28%
Invesco Capital Management LLC
3,243,130$79.5m12.3%0.07%
1%
Sound Shore Management, Inc.
2,548,772$62.5m-19.79%2.52%
0.9%
Marathon Asset Management Limited
2,282,172$55.9m-5.37%0.35%
0.89%
Northern Trust Global Investments
2,258,006$55.3m-2.35%0.01%
0.85%
Morgan Stanley, Investment Banking and Brokerage Investments
2,152,892$52.8m10.1%0.01%
0.83%
AQR Capital Management, LLC
2,108,406$51.7m-32.46%0.12%
0.78%
Norges Bank Investment Management
1,974,938$48.4m0%0.01%
0.73%
LSV Asset Management
1,860,550$45.6m54.76%0.1%
0.71%
Legal & General Investment Management Limited
1,814,111$44.5m2.79%0.01%
0.7%
Charles Schwab Investment Management, Inc.
1,781,483$43.7m1.25%0.01%
0.68%
Sarofim Fayez & Co
1,728,650$42.4m-0.56%0.17%
0.59%
Dimensional Fund Advisors LP
1,499,239$36.7m0.07%0.01%
0.59%
Thompson, Siegel & Walmsley LLC
1,491,291$36.6m-23.02%0.48%
0.57%
Pacer Advisors, Inc.
1,442,458$35.4m30.43%0.38%
0.57%
J.P. Morgan Asset Management, Inc.
1,438,767$35.3m-7.56%0.01%
0.56%
State Farm Insurance Companies, Asset Management Arm
1,423,120$34.9m0%0.04%

Company Information

Organon & Co.'s employee growth, exchange listings and data sources


Key Information

  • Name: Organon & Co.
  • Ticker: OGN
  • Exchange: NYSE
  • Founded: 2020
  • Industry: Pharmaceuticals
  • Sector: Pharmaceuticals & Biotech
  • Implied Market Cap: US$6.234b
  • Shares outstanding: 254.33m
  • Website: https://www.organon.com

Number of Employees


Location

  • Organon & Co.
  • 30 Hudson Street
  • Floor 33
  • Jersey City
  • New Jersey
  • 7302
  • United States


Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
OGN *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNMay 2021
7XPDB (Deutsche Boerse AG)YesCommon StockDEEURMay 2021
OGNNYSE (New York Stock Exchange)YesCommon StockUSUSDMay 2021
0A9WLSE (London Stock Exchange)YesCommon StockGBUSDMay 2021
OGNETLX (Eurotlx)YesCommon StockITEURMay 2021

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/09/28 00:00
End of Day Share Price2022/09/28 00:00
Earnings2022/06/30
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.