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Barclays initiates coverage of Organon with Overweight rating, projecting 70% upside

EditorAmbhini Aishwarya
Published 22/09/2023, 05:46 pm
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On Thursday, Barclays (LON:BARC) initiated its coverage on the global healthcare company, Organon (NYSE:OGN), with an Overweight recommendation. The bank set an average one-year price target of $31.62 for the company, a potential increase of 70.18% from its last reported closing price of $18.58. The price forecasts for the healthcare firm range from a low of $23.23 to a high of $45.15.

The projected annual revenue for Organon stands at $6,376MM, indicating a growth rate of 3.37%. The company's projected non-GAAP EPS is 4.89. The company declared a regular quarterly dividend of $0.28 per share ($1.12 annualized) on August 8, 2023, which was paid out to shareholders of record as of August 18, 2023, on September 14, 2023.

Organon's current share price is $18.58 per share, yielding a dividend yield of 6.03%. Over the past five years, the average dividend yield has been 4.33%, with the lowest being 2.95% and the highest reaching up to 6.87%. The current dividend yield is significantly above the historical average by approximately 1.64 standard deviations.

Despite the attractive yield, it should be noted that nearly 38% of Organon's income is paid out in dividends as indicated by the company's dividend payout ratio of 0.38. However, Organon has not increased its dividend in the past three years.

Institutional ownership in Organon currently comprises 1274 funds or institutions, marking a decrease of about 6.19% or 84 owners in the last quarter. The total shares owned by institutions have also decreased by around 3.02% to 229,416K shares in the last three months. The put/call ratio of Organon stands at 1.12, suggesting a bearish outlook.

Among the shareholders, Mawer Investment Management holds 13,194K shares, which represents 5.16% ownership of the company. Massachusetts Financial Services owns 8,844K shares, accounting for 3.46% of the company. Invesco has 8,277K shares, representing 3.24% ownership. Vanguard Total Stock Market Index Fund Investor Shares and Vanguard Small-Cap Index Fund Investor Shares hold 7,930K and 6,585K shares, respectively.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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