SG Americas Securities LLC has reduced its stake in Royalty Pharma PLC (NASDAQ: RPRX) by 22% during the third quarter of 2023, according to a recent filing with the U.S. Securities and Exchange Commission (SEC). After selling 15,132 shares, the firm now holds 53,573 shares in the biopharmaceutical company, valued at approximately $1.89 million.
This change is part of a broader trend among institutional investors adjusting their positions in Royalty Pharma. Notably, Norges Bank acquired a new stake worth $181.39 million in the company during the second quarter. Meanwhile, Arrowstreet Capital Limited Partnership increased its holdings by 118.7%, owning 2,976,480 shares valued at $107.24 million after purchasing an additional 1,615,706 shares. Other significant investors include Amundi, which raised its stake by 126.1%, and Jupiter Asset Management Ltd., which increased its holdings by 126.5%.
State Street Corp also expanded its stake by 7.1%, now owning 10,194,938 shares worth around $367.32 million. Collectively, institutional investors and hedge funds own 54.35% of Royalty Pharma’s stock.
Recent Insider Activity and Financial Performance
In related news, Terrance P. Coyne, Chief Financial Officer of Royalty Pharma, sold 69,594 shares on November 17, 2023, for a total value of $2,735,044.20, significantly reducing his position by 55.96%. Following this transaction, Coyne retained 54,760 shares, valued at approximately $2.15 million. Similarly, George W. Lloyd, Executive Vice President, sold 132,426 shares on November 19, 2023, for about $5.08 million. Over the past 90 days, insiders have sold 936,093 shares worth nearly $36.50 million, while insiders currently hold 18.90% of the company’s stock.
Royalty Pharma recently reported its quarterly earnings on November 5, 2023. The company achieved $1.17 in earnings per share (EPS), exceeding the consensus estimate of $1.11 by $0.06. Revenue for the quarter was $609.29 million, falling short of analyst estimates of $765.01 million. The firm reported a return on equity of 26.36% and a net margin of 32.51%. Analysts forecast an average EPS of 4.49 for the current year.
Dividend Increase and Analyst Ratings
In a positive development, Royalty Pharma announced an increase in its quarterly dividend. The company will pay $0.235 per share on March 10, 2024, to investors on record as of February 20, 2024. This represents an increase from the previous dividend of $0.22, resulting in an annualized dividend of $0.94 and a yield of 2.3%. The company’s payout ratio stands at 71.21%.
Analysts have varied opinions on Royalty Pharma’s stock. TD Cowen raised its target price from $42.00 to $45.00 with a “buy” rating. Conversely, Weiss Ratings downgraded the stock from a “buy” to a “hold” rating. Meanwhile, Morgan Stanley adjusted its price target from $55.00 to $54.00, maintaining an “overweight” rating.
Currently, five analysts rate Royalty Pharma as a “buy,” while one holds a “hold” rating. According to data from MarketBeat, the stock has an average rating of “Moderate Buy” with a consensus target price of $45.60.
Royalty Pharma PLC specializes in acquiring biopharmaceutical royalty interests and offers non-dilutive financing to drug developers and rights holders. By purchasing future royalty streams and milestone-contingent payments, the company aims to generate long-term cash flows linked to the commercial performance of various pharmaceutical and biotechnology products.
