Royalty Pharma heads into its Q1 2026 earnings call on May 8 with the stock at a one-year high — and its own CFO cashing out along the way.
The most striking data point heading into the print is not in the options market or the borrow desk — it is the CFO's selling pattern. Terrance Coyne sold shares in four separate clusters between early March and late April, offloading roughly $4.9 million in total across the 90-day window. The trades were spread across monthly intervals, suggesting a systematic disposal programme rather than a single opportunistic sale. The stock has gained 4.4% over the past month and is up 30.5% year-to-date, so the timing is mechanically sensible — but the consistency of the selling is worth noting for a print where management tone will matter.
Options traders, by contrast, are leaning bullish. The put/call ratio has dropped to 0.17, well below its 20-day average of 0.33 and more than 1.6 standard deviations beneath it — one of the most call-skewed readings of the past year against a 52-week low of 0.09. That kind of positioning reflects demand for upside exposure rather than defensive hedging, an unusual tilt for a stock on earnings eve. Short interest reinforces the lack of bearish conviction: at 2.8% of free float with days-to-cover under one day, bearish positioning is minimal. Borrow availability is loose — the utilization-implied availability is extremely wide — and cost to borrow has ticked higher recently but remains negligible at 0.47%.
The analyst community has been consistently constructive. Morgan Stanley raised its target to $63 in early April while maintaining Overweight. UBS lifted to $57 and reiterated Buy on April 21. The consensus mean target of $54.75 implies a modest 8% return from $50.72, but the direction of recent moves has been firmly upward. Bulls point to Royalty Pharma's structural advantages: a portfolio of royalty streams on drugs including Cystic Fibrosis treatments and oncology assets that generate predictable cash flows largely insulated from clinical risk. Forward EPS estimates rank in the 100th percentile for year-on-year growth, and the 12-month forward dividend yield of 1.9% provides a floor for income-oriented holders. Bears note that at a P/E of roughly 9.6x and an EV/EBITDA near 10x the stock is not cheap by royalty-company standards, and the net debt load of approximately $8.6 billion deserves scrutiny if management commentary flags any capital deployment constraints.
Capital Research and Management holds 7.4% of shares and added 4.2 million shares in the most recent reported period — a significant conviction move from a typically slow-moving institution. The institutional base is broadly stable, with BlackRock, Fidelity, and Vanguard all holding steady. Peers have been mixed on the week: BMY fell 2.2% while TEVA surged 13.4%, suggesting sector tailwinds are idiosyncratic rather than tide-driven. RPRX gained 2.5% over the same period.
Tomorrow's Q1 release will test whether the royalty portfolio's revenue trajectory justifies the year-to-date re-rating — and whether management's capital allocation guidance can hold the gap between the current price and a consensus target that the stock is rapidly closing in on.
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