Barclays Reaffirms Buy Rating on Revolution Medicines with $72 Price Target

Barclays reaffirmed their Buy rating on Revolution Medicines (RVMD) with a $72.00 price target. The company's shares closed at $36.07. Peter Lawson, a Barclays analyst, has an average return of -8.3% and a 36.09% success rate. The Street has a Strong Buy consensus rating for RVMD with an average price target of $67.55, representing an 87.27% upside.

Royalty Pharma recently announced a significant multi-billion dollar funding collaboration with Revolution Medicines, completed the integration of its external manager, and raised its full-year guidance following the release of its second-quarter 2025 financial results. These developments underscore the company’s commitment to portfolio growth and cost efficiency, while also reflecting proactive capital deployment through buybacks and dispute resolution initiatives [1].

The Revolution Medicines partnership is particularly notable as it provides Royalty Pharma with access to new blockbuster assets, potentially bolstering its long-term investment narrative. However, the company continues to face the ongoing Alyftrek royalty dispute, which remains a significant short-term risk, impacting revenue visibility and earnings stability [1].

Royalty Pharma's recent buyback program, which retired over 31 million shares for more than US$1 billion, signals a proactive approach to capital deployment, supporting shareholder returns and offsetting potential dilution and risks associated with ongoing disputes [1].

Barclays has reaffirmed its Buy rating on Revolution Medicines (RVMD), setting a $72.00 price target. The company's shares closed at $36.07, reflecting a strong consensus rating of Strong Buy among analysts, with an average price target of $67.55, representing an 87.27% upside [2].

Royalty Pharma is projected to reach $3.7 billion in revenue and $1.4 billion in earnings by 2028, requiring an annual revenue growth rate of 18.3% and a $0.3 billion increase in earnings from the current $1.1 billion [1]. This outlook highlights the company’s potential for significant growth, contingent on resolving the ongoing royalty disputes and leveraging its new strategic partnerships effectively.

Investors should remain vigilant regarding the uncertainties surrounding Royalty Pharma’s cash flow outlook, as unresolved royalty litigations could meaningfully affect near-term earnings and cash flows. However, the company’s recent strategic moves and strong financial projections suggest a promising future, provided that it can navigate the challenges posed by ongoing disputes [1].

References:
[1] https://simplywall.st/stocks/us/pharmaceuticals-biotech/nasdaq-rprx/royalty-pharma/news/how-investors-are-reacting-to-royalty-pharma-rprx-revolution
[2] Barclays reaffirms Buy rating on Revolution Medicines (RVMD) with $72.00 price target