10 Stocks with Biggest Upside Potential According to Hedge Funds

5) Royalty Pharma plc (NASDAQ:RPRX)

Average Upside Potential: 51.35%

Number of Hedge Fund Holders: 34

Royalty Pharma plc (NASDAQ:RPRX) is engaged in operating as a buyer of biopharmaceutical royalties and a funder of innovations in the biopharmaceutical industry in the US.

Wall Street experts opine that Royalty Pharma plc (NASDAQ:RPRX)’s growth trajectory is expected to be aided by its high-quality royalty portfolio having an average royalty duration of ~12 years. The FDA’s approval of Voranigo should be a new growth driver. Royalty Pharma plc (NASDAQ:RPRX) raised its full-year 2024 guidance and it now expects portfolio receipts to be between $2.7 billion and $2.775 billion.

Royalty Pharma plc (NASDAQ:RPRX) is a leader when it comes to large royalty transactions and has a strong repeat business record with partners. Its development stage pipeline should unlock significant value, with expectations to garner more than $1.2 billion in annual peak royalties. Wall Street believes that Royalty Pharma plc (NASDAQ:RPRX)’s late-stage development pipeline possesses significant potential to contribute to future earnings. The company has a robust deal pipeline, with $14.7 billion in transactions announced since 2020.

The company has exciting pipeline opportunities like LP(a) drugs and frexalimab, which are anticipated to help it in the upcoming years. Given the strength and diversification of the company’s portfolio, it remains well-placed for long-term revenue growth. Its proactive approach to identifying and investing in innovative therapies should act as a critical growth driver despite potential market challenges.

The Goldman Sachs Group increased its price target on the shares of Royalty Pharma plc (NASDAQ:RPRX) from $50.00 to $51.00, giving a “Buy” rating on 14^th August.

Patient Capital Management, a value investing firm, released its second quarter 2024 investor letter. Here is what the fund said:

“While Royalty Pharma plc (NASDAQ:RPRX) is in the health care space, it is more like an investment firm that buys royalty assets in the healthcare space. The company has an extremely strong track record, running the business for over 20 years as a private fund before bringing it public. The market opportunity for external royalty funding has only grown as early-stage start-ups need funding and legacy players are looking to lower their debt levels. We think Royalty Pharma is perfectly positioned as the partner of choice. The company is disciplined, maintaining deal internal rate of returns (IRRs) in the low-teens despite the higher interest rate environment. We think as the company continues to deliver as a public company, the market will start paying attention.”