RPRX
Royalty Pharma plc
$54.50
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Undervalued
Trading 27.9% below fair value
You pay
$54.50
Bear
$64.78
Fair
$75.58
Bull
$86.38
Bear
$64.78
+18.9%
$5.79 × 12x P/E
Fair
$75.58
+38.7%
$5.79 × 14x P/E
Bull
$86.38
+58.5%
$5.79 × 16x P/E
Key Value Driver
Normalized P/E multiple (14x base case)
Implied Market Multiple
9.4x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $53.75 from 11 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $75.58 per share.
Warnings
The company's reported profits differ from official accounting profits by 222%. Check what costs are being left out of the adjusted number.
Dividend-based valuation: $29.76 (below our primary estimate by 63%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $53.75 (from 11 analysts). Our estimate is 51% above the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples