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Royalty Pharma
(NASDAQ:RPRX)
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Rating:78Outperform
Price Target:
$66.00
▲(12.19% Upside)
Action:Reiterated
Date:08/05/26
The score is driven primarily by strong financial performance (high margins and robust cash flow) and a positive earnings-call outlook (raised guidance and continued disciplined deployment). Offsetting factors are balance-sheet leverage risk, only moderate valuation support (P/E ~23.7; ~1.56% yield), and a technical picture that is positive longer-term but neutral in the near term.
Positive Factors
Cash generation
Royalty Pharma’s business generates very high, recurring operating cash flow (OCF ~ $3.0B TTM) with free cash flow roughly equal to OCF. Durable cash conversion supports debt servicing, repeat acquisitions, buybacks and dividends, providing long‑term financial flexibility independent of short‑term market swings.
Negative Factors
Elevated leverage
Royalty Pharma carries sizable, increasing leverage (~$9B debt, leverage ~2.7–2.9x EBITDA) which raises sensitivity to any sustained decline in portfolio receipts. High interest and principal commitments can constrain future deal activity or force issuance of equity/debt under adverse conditions, limiting strategic optionality.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation
Royalty Pharma’s business generates very high, recurring operating cash flow (OCF ~ $3.0B TTM) with free cash flow roughly equal to OCF. Durable cash conversion supports debt servicing, repeat acquisitions, buybacks and dividends, providing long‑term financial flexibility independent of short‑term market swings.
Read all positive factors
Royalty Pharma Key Performance Indicators (KPIs)
Any
Portfolio Receipts
Tracks the income generated from the company's portfolio of royalty interests, highlighting cash flow stability and the effectiveness of its investment strategy in acquiring lucrative royalty streams.
Tracks the income generated from the company's portfolio of royalty interests, highlighting cash flow stability and the effectiveness of its investment strategy in acquiring lucrative royalty streams.
Data provided by:
The Fly
The FlyRoyalty Pharma (RPRX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$33.65B
Dividend Yield1.56%
Average Volume (3M)3.18M
Price to Earnings (P/E)23.7
Beta (1Y)0.21
Revenue Growth7.79%
EPS Growth-22.14%
CountryUS
Employees100
SectorHealthcare
Sector Strength45
IndustryMedical - Pharmaceuticals
Share Statistics
EPS (TTM)2.46
Shares Outstanding443,274,100
10 Day Avg. Volume2,718,135
30 Day Avg. Volume3,176,121
Financial Highlights & Ratios
PEG Ratio0.78
Price to Book (P/B)2.58
Price to Sales (P/S)7.02
P/FCF Ratio6.70
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$62.40Price Target Upside6.07% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
EPS Forecast (FY)5.23
Revenue Forecast (FY)$3.47B
Royalty Pharma Business Overview & Revenue Model
Company Description
Royalty Pharma plc (RPRX) is a biopharmaceutical royalty company that acquires and manages a portfolio of royalty and related interests in revenue-generating biopharmaceutical products and late-stage development programs. The company operates in t...
How the Company Makes Money
Royalty Pharma makes money primarily by purchasing rights to receive a portion of the future economics of specific biopharmaceutical assets and then collecting cash flows as those underlying drugs generate sales or achieve contractual events. Key ...
Royalty Pharma Earnings Call Summary
Earnings Call Date:Aug 05, 2026
(Q2-2026)
| Next Earnings Date:Nov 11, 2026
Earnings Call Sentiment Positive
The call emphasized multiple strong positives: double‑digit recurring cash flow growth, raised full‑year guidance, disciplined capital deployment (including a strategic cliramitug purchase), expanded development‑stage pipeline with high historical success rates, robust cash generation, and an investment‑grade credit upgrade. Lowlights were present but largely manageable: a material decline in milestone/contract receipts (one‑time prior period effect), specific product headwinds (Promacta, biosimilar Tysabri, IRA), dependence on future pivotal trial outcomes for some investments, modestly higher expected operating expense rates in H2, and geopolitical/regulatory uncertainty in China. Overall, the positives—strong growth, improved guidance, financial flexibility, and portfolio expansion—substantially outweigh the risks and near‑term headwinds.Positive Updates
Double‑digit recurring cash flow growth
Royalty receipts (recurring cash flows) grew 14% year‑over‑year in Q2 2026; portfolio receipts (top line) grew 6% to $773 million, slightly ahead of expectations.
Negative Updates
Decline in milestones and other contractual receipts
Milestones and other contractual receipts fell substantially versus the prior year due to a one‑time payment in the prior period; management expects these receipts to decrease from $128M in 2025 to about $60M in 2026.
Read all updates
Q2-2026 Updates
Positive
Negative
Double‑digit recurring cash flow growth
Royalty receipts (recurring cash flows) grew 14% year‑over‑year in Q2 2026; portfolio receipts (top line) grew 6% to $773 million, slightly ahead of expectations.
Read all positive updates
Company Guidance
Royalty Pharma raised its 2026 full‑year guidance, now targeting portfolio receipts of $3.4–$3.5 billion (up from $3.325–$3.45 billion previously), reflecting expected royalty‑receipt growth of ~7%–10% (vs prior 4%–8%); the outlook assumes milestones and other contractual receipts will decline to ≈$60 million in 2026 (from $128 million in 2025) and incorporates Promacta LOE, a U.S. biosimilar Tysabri launch and potential IRA impact. Management guided operating and professional costs to 5.5%–6.5% of portfolio receipts and interest paid to ~$350–$360 million for 2026 (about $175 million in Q3, de minimis in Q4), and emphasized the guidance is based on the portfolio as of today and excludes benefits from any future royalty acquisitions.Royalty Pharma Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
67
Positive
Cash Flow
90
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.44B | 2.38B | 2.26B | 2.35B | 2.24B | 2.29B |
| Gross Profit | 2.44B | 2.38B | 2.26B | 2.35B | 2.24B | 2.29B |
| EBITDA | 1.70B | 1.64B | 1.56B | 1.89B | 423.69M | 1.43B |
| Net Income | 827.60M | 770.95M | 858.98M | 1.13B | 42.83M | 619.73M |
Balance Sheet | ||||||
| Total Assets | 19.82B | 19.62B | 18.22B | 16.38B | 16.81B | 17.52B |
| Cash, Cash Equivalents and Short-Term Investments | 608.29M | 637.50M | 1.77B | 1.23B | 2.43B | 2.80B |
| Total Debt | 8.96B | 8.95B | 7.61B | 6.14B | 7.12B | 7.10B |
| Total Liabilities | 9.88B | 9.91B | 7.88B | 6.30B | 7.29B | 7.27B |
| Stockholders Equity | 6.89B | 6.48B | 6.95B | 6.53B | 5.63B | 5.78B |
Cash Flow | ||||||
| Free Cash Flow | 2.65B | 2.49B | 2.77B | 2.99B | 2.14B | 2.02B |
| Operating Cash Flow | 2.65B | 2.49B | 2.77B | 2.99B | 2.14B | 2.02B |
| Investing Cash Flow | -2.64B | -1.61B | -2.68B | -2.07B | -1.03B | -1.87B |
| Financing Cash Flow | -517.34M | -1.19B | 361.14M | -2.15B | -944.86M | 385.11M |
Royalty Pharma Technical Analysis
Neutral
58.83
Price Trends
56.27
Positive
52.52
Positive
46.41
Positive
Market Momentum
0.65
Positive
50.03
Neutral
25.48
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RPRX, the sentiment is Neutral. The current price of 58.83 is above the 20-day moving average (MA) of 58.01, above the 50-day MA of 56.27, and above the 200-day MA of 46.41, indicating a neutral trend. The MACD of 0.65 indicates Positive momentum. The RSI at 50.03 is Neutral, neither overbought nor oversold. The STOCH value of 25.48 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for RPRX.
Royalty Pharma Risk Analysis
Royalty Pharma disclosed 58 risk factors in its most recent earnings report. Royalty Pharma reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Royalty Pharma Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
84 Outperform | $24.23B | 14.70 | 29.70% | ― | 26.93% | 80.66% | |
78 Outperform | $33.65B | 23.71 | 12.67% | 1.55% | 7.79% | -22.14% | |
74 Outperform | $21.98B | 17.69 | 19.24% | ― | 5.87% | 8.18% | |
63 Neutral | $17.12B | 21.56 | 14.55% | ― | 21.02% | -24.83% | |
61 Neutral | $15.21B | 25.82 | -5641.90% | ― | 155.14% | ― | |
57 Neutral | $22.91B | -15.58 | -6.67% | ― | 10.01% | -71.78% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
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Royalty Pharma Corporate Events
Business Operations and StrategyExecutive/Board ChangesStock BuybackShareholder Meetings
Royalty Pharma Shareholders Back Board, Pay and Flexibility
Positive
Jun 4, 2026
On June 4, 2026, Royalty Pharma held its 2026 Annual General Meeting of Shareholders, where investors representing 88.08% of voting power participated, establishing a strong quorum and signaling solid shareholder engagement. All nine director nomi...
Business Operations and StrategyPrivate Placements and Financing
Royalty Pharma Secures New $1.8 Billion Credit Facility
Positive
May 28, 2026
On May 22, 2026, Royalty Pharma plc entered into a new $1.8 billion unsecured revolving credit facility with a syndicate of lenders led by Bank of America, replacing its prior revolving credit agreement from 2021 and fully repaying and terminating...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.