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Royalty Pharma PLC
Royalty Pharma PLC (NASDAQ: RPRX) is a buyer of biopharmaceutical royalties, and the portfolio consists of royalties on around 45 therapies.
RPRX will pay a quarterly dividend of USD 0.17 with respect to Q3 FY21 on 15 September 2021, with an ex-dividend date of 19 August 2021
Investment Highlights – Buy at USD 39.09
Key Risks
Q2 FY21 Financial Highlights for the three months period ended 30 June 2021 (as of 11 August 2021)
(Source: Company Result)
One Year Share Price Chart
(Source: Refinitiv; Analysis done by Kalkine Group)
Valuation Methodology: Price/Earnings Approach (NTM) (Illustrative)
Conclusion
The Company had strengthened the business model to gain significant market share in the rapidly growing biopharma royalty funding market with announced acquisitions worth USD 4.7 billion. Moreover, the Company expects payments for operating & professional costs to remain around 9% to 10% of adjusted cash receipts in 2021. Meanwhile, the Company had exhibited its funding capabilities as it entered a strategic funding partnership with MorphoSys. The stock made a 52-week High and Low of USD 53.23 and USD 34.80, respectively.
Considering the improved guidance, consistent dividend payments, and valuation conducted above, we have given a "BUY" stance on Royalty Pharma PLC at the closing market price of USD 39.09 (as on 17 August 2021) with a lower-double digit upside potential based on 17.49x Price/NTM Earnings (approx.) on FY21E earnings per share (approx.).
*The reference data in this report has been partly sourced from REFINITIV.
*All forecasted figures and Peer information have been taken from REFINITIV.
*Dividend Yield may vary as per the stock price movement.
*Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached.