Royalty Pharma pullback a buying opportunity, says Citi

Citi views the recent volatility in shares of Royalty Pharma (RPRX) as a buying opportunity. Worries over the tariff impact to biopharma have broadened to companies with tax havens domiciled outside the U.S., the analyst tells investors in a research note. The firm sees new fears over the tax liability for Royalty Pharma, saying its exposure to “Pillar Two” have been a recent headwind to shares. The company’s Pillar Two policy exposes it to a global minimum tax rate of 15%, contends Citi. After speaking with management, the firm believes Royalty has a “very well established and stable” tax structure in Ireland for passive income streams, which fall outside the scope of Pillar Two. Citi believes the company’s structure that shields tax expense is “very unlikely to change going forward.” It keeps a Buy rating on Royalty Pharma with a $40 price target