Alkermes' (ALKS) better-than-expected Q1 revenue highlights the "underappreciated nature" of the company's core business, analysts at RBC Capital Markets said in a Tuesday note.

Management remains confident in the company's competitive position and multiple catalysts can serve as value inflection points, including phase 2 and phase 3 three idiopathic hypersomnia data and early stage ADHD data, the RBC analysts said.

Q1 royalty revenue came in better than expected, helped by a strong quarter for Vumerity. RBC now expects $1.81 billion in 2026 revenue and said if the strength continues in Q2, the company could point investors to the higher end of its guidance range, according to the note.

RBC said it is looking forward to alixorexton data in idiopathic hypersomnia in H2, which could add another $1 billion in 2035 sales, for a total opportunity of more than $3 billion.

While revenue is strong, the company is maintaining its product-by-product and total revenue guidance of $1.73 billion to $1.84 billion, the brokerage added.

RBC maintained an outperform rating on Alkermes with a price target of $44.

Price: 35.55, Change: -0.70, Percent Change: -1.93