Stockchase Opinions

The Panic-Proof Portfolio (Stockchase Research) Royalty Pharma plc RPRX-Q TOP PICK Feb 06, 2025

Stockchase Research Editor: Michael O'Reilly

We reiterate RPRX as a TOP PICK.  The company is the largest holder of pharma based royalties, providing late stage funding for forward cash royalties.  The company just monetized a recent investment that netted $230 million -- a 76% return on investment -- allowing for a pay down in debt, continuation in share buy backs, and further product development.  The company trades at 8x earnings, 1.8x book and supports a ROE of 24%.  We recommend trailing up the stop (from $22) to $26, looking to achieve $40 -- upside potential of 25%.  Yield 2.6% 

$31.400

Stock price when the opinion was issued

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Invests in biotech and pharma companies in exchange for a royalty. He tracks this one, with its 25B market cap.
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Trades cheaply and is now going higher after being stuck for two years. He always said to stick by this.
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Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

TOP PICK
Stockchase Research Editor: Michael O'Reilly

RPRX partners with pharma companies like Bristol-Myers to help fund development in exchange for collecting royalties.  It pays a good dividend, backed by a payout ratio under 33% of cash flow.  It trades at 10x earnings, under 2x book and supports a 17% ROE.  Its portfolio grew by 15% this year. We recommend setting a stop-loss at $22, looking to achieve $33 -- upside potential of 28%.  Yield 3.2%

(Analysts’ price target is $41.53)
premium

This is a Panic-proof Portfolio opinion which is available only for Premium members

Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

TOP PICK
Stockchase Research Editor: Michael O’Reilly

We reiterate RPRX as a TOP PICK.  This unique pharma company has investments in 35 jointly developed royalty products, with the largest pharma companies and has several new joint products in development.  It trades at 17x earnings, 2.1x book and supports a 12% ROE.  We recommend trailing up the stop (from $26) to $29, looking to achieve $41 — upside potential of 25%.  Yield 2.6%

(Analysts’ price target is $41.00)