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Royalty Pharma (RPRX) Surges 5.2%: Is This an Indication of Further Gains?

Royalty Pharma (RPRX) shares soared 5.2% in the last trading session to close at $43.20. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 2.7% gain over the past four weeks.

Shares of Royalty Pharma rallied for the second consecutive day. Being in the leadership position in the large and growing royalty acquisition market and solid track record of investments, as well as favorable industry trends continue to drive the company’s financials. These factors possibly led to the bullish investor stance, which drove Royalty Pharma higher.

This company is expected to post quarterly earnings of $0.77 per share in its upcoming report, which represents a year-over-year change of +8.5%. Revenues are expected to be $530.28 million, up 11.6% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Royalty Pharma, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on RPRX going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Royalty Pharma is a member of the Zacks Financial - Miscellaneous Services industry. One other stock in the same industry, Columbia Financial (CLBK), finished the last trading session 2.1% higher at $22.13. CLBK has returned 5.7% over the past month.

For Columbia Financial , the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.23. This represents a change of -14.8% from what the company reported a year ago. Columbia Financial currently has a Zacks Rank of #2 (Buy).

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