Royalty Pharma (NASDAQ:RPRX) Reaches New 1-Year High - Should You Buy?

Key Points

• Royalty Pharma hit a new 52-week high (intraday high $50.25) and the stock carries an overall Buy consensus with an average price target of $50.33, as several brokers (e.g., Morgan Stanley to $63, UBS to $57) recently raised targets or reiterated positive ratings.
• Recent results showed an EPS beat ($1.46 vs. $1.33) but revenue missed ($622M vs. $840M expected); the company has a $28.6B market cap, P/E ~36.8, and declared a $0.235 quarterly dividend (1.9% yield, ~69.6% payout ratio).
• Insiders have sold material stock (about 367,914 shares worth ~$16M in the past 90 days), even as large institutions boosted positions (Morgan Stanley up 25.2%), with institutional ownership around 54.35%.

Royalty Pharma PLC (NASDAQ:RPRX - Get Free Report) hit a new 52-week high during mid-day trading on Tuesday . The company traded as high as $50.25 and last traded at $49.4950, with a volume of 211088 shares. The stock had previously closed at $49.65.

Analysts Set New Price Targets

A number of brokerages have recently issued reports on RPRX. Morgan Stanley raised their price target on shares of Royalty Pharma from $61.00 to $63.00 and gave the stock an "overweight" rating in a report on Friday, April 10th. The Goldman Sachs Group reiterated a "buy" rating on shares of Royalty Pharma in a report on Thursday, February 12th. UBS Group lifted their target price on shares of Royalty Pharma from $51.00 to $57.00 and gave the company a "buy" rating in a report on Tuesday, April 21st. Weiss Ratings upgraded shares of Royalty Pharma from a "hold (c+)" rating to a "buy (b-)" rating in a report on Thursday, February 12th. Finally, Wall Street Zen downgraded shares of Royalty Pharma from a "strong-buy" rating to a "buy" rating in a report on Saturday, February 14th. Six research analysts have rated the stock with a Buy rating, According to data from MarketBeat, Royalty Pharma has an average rating of "Buy" and an average price target of $50.33.

Royalty Pharma Price Performance

The company has a current ratio of 2.40, a quick ratio of 2.40 and a debt-to-equity ratio of 0.88. The company's fifty day moving average is $47.05 and its two-hundred day moving average is $42.16. The stock has a market cap of $28.64 billion, a price-to-earnings ratio of 36.75, a P/E/G ratio of 3.15 and a beta of 0.39.

Royalty Pharma (NASDAQ:RPRX - Get Free Report) last posted its earnings results on Wednesday, February 11th. The biopharmaceutical company reported $1.46 earnings per share for the quarter, beating the consensus estimate of $1.33 by $0.13. The firm had revenue of $621.99 million during the quarter, compared to the consensus estimate of $839.97 million. Royalty Pharma had a net margin of 32.38% and a return on equity of 28.21%. As a group, research analysts predict that Royalty Pharma PLC will post 5.08 earnings per share for the current year.

Royalty Pharma Dividend Announcement

The firm also recently declared a quarterly dividend, which will be paid on Wednesday, June 10th. Shareholders of record on Friday, May 15th will be paid a $0.235 dividend. The ex-dividend date is Friday, May 15th. This represents a $0.94 annualized dividend and a dividend yield of 1.9%. Royalty Pharma's payout ratio is 69.63%.

Insider Buying and Selling at Royalty Pharma

In related news, CFO Terrance P. Coyne sold 114,954 shares of the business's stock in a transaction on Tuesday, February 3rd. The shares were sold at an average price of $42.84, for a total value of $4,924,629.36. Following the completion of the sale, the chief financial officer directly owned 23,972 shares of the company's stock, valued at $1,026,960.48. The trade was a 82.74% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this hyperlink. Also, EVP Marshall Urist sold 20,000 shares of the business's stock in a transaction on Friday, January 30th. The shares were sold at an average price of $41.09, for a total transaction of $821,800.00. The SEC filing for this sale provides additional information. In the last 90 days, insiders sold 367,914 shares of company stock valued at $16,074,774. Insiders own 18.84% of the company's stock.

Institutional Inflows and Outflows

A number of institutional investors have recently bought and sold shares of the business. Morgan Stanley increased its stake in Royalty Pharma by 25.2% in the fourth quarter. Morgan Stanley now owns 55,274,069 shares of the biopharmaceutical company's stock valued at $2,135,790,000 after purchasing an additional 11,110,115 shares during the period. Capital International Investors increased its stake in Royalty Pharma by 14.3% in the fourth quarter. Capital International Investors now owns 31,104,309 shares of the biopharmaceutical company's stock valued at $1,201,870,000 after purchasing an additional 3,891,615 shares during the period. State Street Corp increased its stake in Royalty Pharma by 3.7% in the fourth quarter. State Street Corp now owns 10,649,641 shares of the biopharmaceutical company's stock valued at $411,502,000 after purchasing an additional 376,888 shares during the period. Geode Capital Management LLC increased its stake in Royalty Pharma by 1.3% in the fourth quarter. Geode Capital Management LLC now owns 7,719,843 shares of the biopharmaceutical company's stock valued at $297,465,000 after purchasing an additional 102,430 shares during the period. Finally, Victory Capital Management Inc. increased its stake in Royalty Pharma by 9.7% in the fourth quarter. Victory Capital Management Inc. now owns 5,106,905 shares of the biopharmaceutical company's stock valued at $197,331,000 after purchasing an additional 449,498 shares during the period. 54.35% of the stock is currently owned by institutional investors and hedge funds.

About Royalty Pharma

Royalty Pharma plc is a specialty finance company that acquires biopharmaceutical royalty interests and provides non-dilutive financing to drug developers and rights holders. The firm purchases future royalty streams, milestone-contingent payments and other revenue rights linked to approved and late-stage pharmaceutical and biotechnology products. By paying upfront consideration for these rights, Royalty Pharma seeks to generate long-term cash flows tied to the commercial performance of a diversified portfolio of medicines.

The company's transaction structures include outright royalty purchases, structured financings and milestone arrangements tailored to the needs of innovator companies, academic institutions and investors.

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