Is Royalty Pharma Plc overvalued or undervalued?

As of 14 November 2025, the valuation grade for Royalty Pharma Plc moved from expensive to fair. The company is currently fairly valued, with a P/E ratio of 11, a Price to Book Value of 2.84, and an EV to EBITDA of 13.43. In comparison, its peer Incyte Corp. has a significantly higher P/E ratio of 22.95, indicating that Royalty Pharma may offer better value relative to its earnings.
Despite recent strong performance, with a year-to-date return of 53.51% compared to the S&P 500's 14.49%, the company's long-term returns over three and five years have lagged significantly behind the index. This suggests that while Royalty Pharma is currently fairly valued, caution may be warranted for long-term investors given its historical performance trends.