Organon & Co: Cost Takeout Catalysts, Initiate Strong Buy

May 12, 2025 11:47 AM ETOrganon & Co. (OGN) StockOGN37 Comments
Moretus Research
357 Followers
(12min)

Summary

  • Initiate Strong Buy on Organon & Co. with $26.4 PT, driven by cost savings, Nexplanon momentum, and biosimilars diversification offsetting Established Brands LOE.
  • Forecasted EPS of $4.00 (FY25; +20.1% Y/Y) and $4.40 (FY26; +10.0%), well above consensus, supported by operational leverage and dividend cut for deleveraging.
  • Transformational cost savings of >$200M by FY25 and $275M by FY26, driving margin expansion and multi-year EPS acceleration.
  • Risks include execution of cost savings, biosimilars pricing pressures, and U.S. reimbursement policy, but current valuation offers attractive asymmetry for patient investors.
Female doctor discussing treatment on digital tablet with female patient in exam room

MoMo Productions/DigitalVision via Getty Images

Key thesis

We initiate (NYSE: NYSE:OGN) at Strong Buy w/ $26.4 PT. Organon & Co. is a diversified portfolio of Rx therapies anchored by global leadership in women's health and accelerating biosimilars. Our thesis is supported by a forecasted operational inflection , with

This article was written by

Moretus Research
357 Followers
Moretus Research delivers state-of-the-art, buy-side quality equity research for serious investors seeking clarity, conviction, and alpha. Focused on U.S. public markets, Moretus applies a structured, repeatable framework to identify companies with durable business models, mispriced cash flow potential, and intelligent capital allocation. Built on institutional standards, Moretus Research combines rigorous fundamental analysis with a high-signal, judgment-driven process—eschewing noise, narrative, and overly complex forecasting. Valuation is based on pragmatic, sector-relevant multiples tailored to each company’s business model and capital structure, with an emphasis on comparability, simplicity, and relevance. Research coverage tends to favor underappreciated companies undergoing structural change or temporary dislocation—situations where dispassionate analysis and variant perception can lead to asymmetric returns. All work reflects a deep respect for capital, discipline, and long-term compounding. Moretus Research aims to raise the standard for independent investment research—providing professional-grade insights, actionable valuation, and a strong filter for what truly matters in modern equity analysis.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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