Royalty Pharma (NASDAQ:RPRX) Reaches New 12-Month High - Still a Buy?

Key Points

• Royalty Pharma hit a new 52-week high of $47.86 (last $47.43) on heavy volume (~4.34M) and has a market cap of about $27.36 billion.
• Analysts remain positive with multiple upgrades and re-affirmations to Buy (Citigroup raised its target to $50, UBS to $49), and the consensus average price target is roughly $48.67.
• The company beat EPS ($1.46 vs. $1.33 est.) but missed revenue estimates substantially, raised its quarterly dividend to $0.235 (annual $0.94, ~2.0% yield), and has seen notable insider selling including a CFO sale and 778,654 shares sold in the last three months.

Royalty Pharma PLC (NASDAQ:RPRX - Get Free Report) shares reached a new 52-week high on Thursday . The stock traded as high as $47.86 and last traded at $47.43, with a volume of 4344628 shares. The stock had previously closed at $47.48.

Analysts Set New Price Targets

A number of equities research analysts recently weighed in on RPRX shares. Citigroup upped their target price on shares of Royalty Pharma from $48.00 to $50.00 and gave the stock a "buy" rating in a report on Tuesday, January 27th. Wall Street Zen lowered Royalty Pharma from a "strong-buy" rating to a "buy" rating in a report on Saturday, February 14th. The Goldman Sachs Group reiterated a "buy" rating on shares of Royalty Pharma in a report on Thursday, February 12th. TD Cowen reissued a "buy" rating on shares of Royalty Pharma in a research report on Friday, February 27th. Finally, UBS Group upgraded Royalty Pharma from a "neutral" rating to a "buy" rating and set a $49.00 price objective on the stock in a research note on Friday, January 30th. Six equities research analysts have rated the stock with a Buy rating, According to MarketBeat, the company currently has a consensus rating of "Buy" and an average target price of $48.67.

Royalty Pharma Trading Down 0.1%

The company has a market cap of $27.36 billion, a P/E ratio of 35.13 and a beta of 0.40. The company has a quick ratio of 2.40, a current ratio of 2.40 and a debt-to-equity ratio of 0.88. The firm's 50-day moving average price is $42.28 and its 200-day moving average price is $39.09.

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 analysts' consensus estimates of $1.33 by $0.13. The business had revenue of $621.99 million during the quarter, compared to analyst estimates of $839.97 million. Royalty Pharma had a return on equity of 28.21% and a net margin of 32.38%. As a group, equities research analysts expect that Royalty Pharma PLC will post 4.49 earnings per share for the current fiscal year.

Royalty Pharma Increases Dividend

The firm also recently disclosed a quarterly dividend, which will be paid on Tuesday, March 10th. Stockholders of record on Friday, February 20th will be issued a $0.235 dividend. This represents a $0.94 dividend on an annualized basis and a dividend yield of 2.0%. The ex-dividend date is Friday, February 20th. This is a positive change from Royalty Pharma's previous quarterly dividend of $0.22. Royalty Pharma's dividend payout ratio (DPR) is presently 69.63%.

Insider Transactions at Royalty Pharma

In related news, CFO Terrance P. Coyne sold 34,791 shares of Royalty Pharma stock in a transaction on Monday, March 2nd. The shares were sold at an average price of $46.78, for a total value of $1,627,522.98. Following the transaction, the chief financial officer directly owned 45,761 shares of the company's stock, valued at $2,140,699.58. The trade was a 43.19% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available through this link. Also, EVP Marshall Urist sold 20,000 shares of the company's stock in a transaction dated Friday, January 30th. The shares were sold at an average price of $41.09, for a total transaction of $821,800.00. Additional details regarding this sale are available in the official SEC disclosure. In the last three months, insiders sold 778,654 shares of company stock valued at $31,489,703. 18.90% of the stock is currently owned by corporate insiders.

Hedge Funds Weigh In On Royalty Pharma

Large investors have recently made changes to their positions in the business. Morgan Stanley increased its holdings in shares of Royalty Pharma by 25.2% during the fourth quarter. Morgan Stanley now owns 55,274,069 shares of the biopharmaceutical company's stock valued at $2,135,790,000 after acquiring an additional 11,110,115 shares in the last quarter. Capital International Investors boosted its stake in Royalty Pharma by 24.4% in the 3rd quarter. Capital International Investors now owns 27,212,694 shares of the biopharmaceutical company's stock worth $960,064,000 after purchasing an additional 5,332,074 shares in the last quarter. Norges Bank purchased a new stake in Royalty Pharma during the 2nd quarter valued at about $181,388,000. Dorsey Asset Management LLC bought a new stake in Royalty Pharma during the 3rd quarter valued at about $82,924,000. Finally, Qube Research & Technologies Ltd increased its stake in Royalty Pharma by 737.3% during the 3rd quarter. Qube Research & Technologies Ltd now owns 2,481,771 shares of the biopharmaceutical company's stock valued at $87,557,000 after purchasing an additional 2,185,366 shares in the last quarter. 54.35% of the stock is currently owned by hedge funds and other institutional investors.

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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