Royalty Pharma (RPRX) has received a new Buy rating, initiated by Goldman Sachs analyst, Asad Haider.
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Asad Haider has given his Buy rating due to a combination of factors that highlight Royalty Pharma’s strategic positioning and growth potential. One of the main reasons is that Royalty Pharma offers a unique opportunity for investors to gain exposure to a diversified portfolio of biopharma royalty streams, which mitigates the typical volatility and risks associated with biotech investments. Additionally, the company is at the beginning of a significant expansion phase, which is expected to capitalize on the growing market for royalty funding, with further growth prospects driven by innovation trends in China.
Another factor influencing the Buy rating is the current valuation of Royalty Pharma, which reflects concerns about a key revenue stream from VRTX. These concerns have been factored into the stock price and company guidance, potentially providing upside if future arbitration results are favorable. Furthermore, Haider anticipates a strong growth trajectory for Royalty Pharma’s royalty receipts, projecting an increase from $2.8 billion in 2024 to $4.6 billion in 2030. This growth, combined with the application of an 11x EV/EBITDA multiple, suggests a 12-month price target of $42, indicating a 20% upside from the current stock price.
In another report released on September 25, TR | OpenAI – 4o also reiterated a Buy rating on the stock with a $40.00 price target.