Organon OGN shares rallied 30.9% in the last trading session to close at $11.26. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 42.2% gain over the past four weeks.
Organon recorded a strong price rise on investors’ optimism following the announcement of its proposed acquisition by Sun Pharmaceutical Industries Limited (“Sun Pharma”). Under the agreement Sun Pharma will acquire all outstanding shares of Organon for $14.00 per share in an all cash transaction with an enterprise valuation of $11.75 billion.
This pharmaceutical company is expected to post quarterly earnings of $0.84 per share in its upcoming report, which represents a year-over-year change of -17.7%. Revenues are expected to be $1.47 billion, down 3% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Organon, the consensus EPS estimate for the quarter has been revised 2.4% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on OGN going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Organon is part of the Zacks Medical Services industry. InnovAge Holding Corp. INNV, another stock in the same industry, closed the last trading session 2.7% higher at $7.95. INNV has returned -2.3% in the past month.
For InnovAge, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.06. This represents a change of +175% from what the company reported a year ago. InnovAge currently has a Zacks Rank of #1 (Strong Buy).
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
