Earnings Release: Here's Why Analysts Cut Their Organon & Co. (NYSE:OGN) Price Target To US$9.67

It's been a pretty great week for Organon & Co. (NYSE:OGN) shareholders, with its shares surging 14% to US$7.62 in the week since its latest quarterly results. Organon reported in line with analyst predictions, delivering revenues of US$1.6b and statutory earnings per share of US$3.33, suggesting the business is executing well and in line with its plan. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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Following last week's earnings report, Organon's six analysts are forecasting 2026 revenues to be US$6.18b, approximately in line with the last 12 months. Statutory earnings per share are predicted to jump 45% to US$2.79. Before this earnings report, the analysts had been forecasting revenues of US$6.33b and earnings per share (EPS) of US$3.23 in 2026. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a real cut to earnings per share numbers.

View our latest analysis for Organon

It'll come as no surprise then, to learn that the analysts have cut their price target 11% to US$9.67. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Organon analyst has a price target of US$12.00 per share, while the most pessimistic values it at US$5.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Organon's past performance and to peers in the same industry. Over the past five years, revenues have declined around 0.1% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 1.5% decline in revenue until the end of 2026. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 9.4% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect Organon to suffer worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Organon going out to 2027, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 2 warning signs for Organon (1 can't be ignored!) that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.