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Investing.com - Citi has raised its price target on Royalty Pharma (NASDAQ:RPRX) to $42.00 from $40.00 while maintaining a Buy rating on the stock. The company’s shares, which have surged over 41% year-to-date, appear undervalued according to InvestingPro analysis, with analyst targets ranging from $32.19 to $54.00.
The research firm cited likely positive trends for the company’s cystic fibrosis (CF) franchise as a key factor in the decision to increase the price target.
Citi also highlighted expected growth for Tremfya, projecting a $7 million increase, alongside a $5 million improvement in the company’s portfolio.
The analyst note mentioned that internalization is driving an improved earnings profile for Royalty Pharma, contributing to the more optimistic outlook.
Royalty Pharma’s business model focuses on acquiring biopharmaceutical royalties and funding innovation across the life sciences industry, with its portfolio including royalty interests in various marketed treatments. The company has demonstrated consistent dividend growth for five consecutive years, with analysts expecting continued profitability this year. Get deeper insights and access to comprehensive analysis with InvestingPro’s detailed research report.
In other recent news, Royalty Pharma announced a dividend of $0.22 per share for the third quarter of 2025, payable on September 10 to shareholders of record as of August 15. The company has also completed a significant acquisition involving RP LLC’s equity interests, valued at $200 million in cash, and issued 24,530,266 non-voting Class E ordinary shares as part of the transaction. Additionally, Royalty Pharma has entered into a $2 billion funding agreement with Revolution Medicines to support the development of daraxonrasib, a cancer drug in Phase 3 trials. This agreement includes a synthetic royalty of up to $1.25 billion and a $750 million senior secured loan. The company has also strengthened its board by appointing Carole Ho and Elizabeth Weatherman as independent directors, increasing its independent board representation to over 90%. In terms of analyst coverage, Morgan Stanley (NYSE:MS) has reinstated Royalty Pharma with an Overweight rating, citing its diversified portfolio and growth profile. These developments highlight Royalty Pharma’s ongoing strategic initiatives and commitment to growth.
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