It's been a good week for Royalty Pharma plc (NASDAQ:RPRX) shareholders, because the company has just released its latest annual results, and the shares gained 2.3% to US$29.92. It was a weak result overall, with Royalty Pharma reporting US$2.4b in revenues, which was 21% less than what the analysts had expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Royalty Pharma

Following the latest results, Royalty Pharma's eight analysts are now forecasting revenues of US$2.68b in 2024. This would be a meaningful 14% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to shrink 6.3% to US$2.38 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.68b and earnings per share (EPS) of US$1.33 in 2024. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the great increase in earnings per share expectations following these results.

There's been no major changes to the consensus price target of US$45.44, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Royalty Pharma analyst has a price target of US$60.00 per share, while the most pessimistic values it at US$37.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Royalty Pharma's rate of growth is expected to accelerate meaningfully, with the forecast 14% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 5.7% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 9.1% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Royalty Pharma is expected to grow much faster than its industry.