OGN - Organon: Q2 Earnings Should Alleviate Bear Concerns
- On its Q2 earnings report, Organon hit all the milestones needed to move the stock out of its post-spin doldrums.
- Data given this quarter should alleviate bear concerns around leverage, revenue declines, growth strategy, dividend, and FCF.
- With P/E and P/FCF multiples at 5-6x, EV/EBITDA at ~7x (using my 2022 estimates), and a dividend yield >3%, the stock is far too cheap relative to its growth outlook.
- I reiterate my late 2022 $75 target (>100% upside), which is supported by multiple valuation approaches.
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Organon: Q2 Earnings Should Alleviate Bear Concerns