UBS upgraded Royalty Pharma (NASDAQ:RPRX) from Neutral to Buy on Friday and simultaneously lifted its price objective to $49.00 from $38.00. At the time of the report the stock was trading at $40.86, hovering close to its 52-week high of $41.70 and reflecting a one-year gain of 32.6%.
The upgrade follows a series of royalty transactions that UBS described as attractive and accretive to Royalty Pharma’s growth trajectory. On that basis the firm revised its medium-term forecasts and now expects stronger compound annual growth through the second half of this decade.
Specifically, UBS raised its 2025-2030 revenue compound annual growth rate (CAGR) estimate to 8%, up from a prior 4% projection. The bank also increased its 2025-2030 EBITDA CAGR estimate to 9%, versus a previous 5% outlook. UBS noted that these revised forecasts sit above consensus estimates, which it identified at 7% revenue CAGR and 8% EBITDA CAGR for the same period.
In discussing Royalty Pharma’s positioning, UBS pointed to favorable macro dynamics and the company’s roster of royalty assets. The analyst team observed that the firm’s growth profile looks attractive both in absolute terms and relative to large-cap pharmaceutical peers that are contending with patent expirations and slow pipeline replenishment through business development.
UBS highlighted that Royalty Pharma holds royalty interests on more than 10 late-stage drugs that have expected clinical updates or potential launches in the next one to two years. The analyst noted that those assets could contribute in excess of $1 billion to the company’s peak royalties.
Recent company announcements provide additional context for UBS’s view. Royalty Pharma reported that the royalty funding market reached a record $10 billion in 2025, and that the company maintained roughly a 40% market share through $4.7 billion of transactions. The firm also declared a quarterly dividend increase of 6.8%, raising the payout to $0.235 per Class A ordinary share for the first quarter of 2026.
Royalty Pharma has continued to expand its portfolio through acquisitions. The company acquired the remaining portion of PTC Therapeutics’ royalty on Roche’s spinal muscular atrophy treatment Evrysdi for $240 million upfront, plus potential milestone payments of up to $60 million. That transaction gave Royalty Pharma full ownership of the tiered royalty structure on Evrysdi, which ranges from 8% to 16% of worldwide net sales.
In addition, Royalty Pharma added royalty rights to two oncology therapies, neladalkib and zidesamtinib, in a deal valued at up to $315 million. UBS cited these and other transactions as illustrative of the company’s active participation in the royalty funding market and its ongoing portfolio-building strategy within healthcare.
The UBS upgrade and forecast revisions reflect the firm’s assessment of improved visibility into future royalty cash flows and a bolstered asset base. Investors will weigh the revised growth expectations, the company’s market share in royalty funding, and the recent acquisitions as they consider Royalty Pharma’s valuation and dividend outlook going forward.