OGN - Organon: Upcoming Q2 Earnings Can Sustain Upward Momentum

2024-07-29 21:41:50 ET

Summary

• Organon stock experienced significant downside pressure in 2023, however positive Q423 and Q124 earnings have led to a bull run.
• Organon's business includes women's health, biosimilars, and established brands divisions. The company was spun out of Merck & Co in 2020, and saddled with >$8bn debt.
• I anticipate Organon's upcoming Q2 2024 earnings will underline growth potential, with a focus on global sales, new product performance, and solid debt management.
• Spin-outs often trade at compellingly low P/S and P/E ratios, which can be misleading, but after a difficult couple of years, Organon's P/S <1x, and P/E <5x makes for a genuinely compelling buy signal.

Investment Overview

I last covered Organon ( OGN ), a company whose stock I own, back in mid-February , reviewing a positive set of full-year 2023 earnings that sent shares rising in value from ~$16, to ~$19, adding fresh momentum to a bull run that began in December 2023.

Until late-December, Organon stock had experienced a torrid 2023, sinking in value from $32 per share in January, to ~$11.5 at the end of November, for an overall loss of nearly 65%....

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