While large cap pharmaceutical stocks have had a very solid year despite the rumbling by the administration over drug pricing, many smaller specialty pharmaceuticals have lagged. Despite that underperformance, some outstanding earnings and, in some cases, even better forward guidance could make some of these companies a best play for the rest of the year.

The Wall Street conference season continues, and Deutsche Bank’s 43rd annual Health Care Conference is underway. A new research report covers some of the companies at the conference, and four top specialty stocks that could have some big upside for investors stood out. All are rated Buy.

Allergan

This stock has taken a beating over the past year and is offering an outstanding entry point. Allergan PLC (NYSE: AGN) is a specialty pharmaceutical company that develops, manufactures and markets branded products. The company’s growth has been driven largely by acquisitions supported by internal growth.

Allergan markets a portfolio of best-in-class products that provide valuable treatments for the central nervous system, eye care, medical aesthetics, gastroenterology, women’s health, urology, cardiovascular and anti-infective therapeutic categories, and it operates the world’s third-largest global generics business, providing patients around the globe with increased access to affordable, high-quality medicines.

Allergan is an industry leader in research and development, with one of the broadest development pipelines in the pharmaceutical industry and a leading position in the submission of generic product applications globally. The Merrill Lynch analysts note the company’s Aesthetics leadership and that the substantial pipeline optionality is not priced in. And with Restasis now a zero, 2018 estimates represent a clean-trough multiple year.

Shareholders receive a 1.97% dividend. The Deutsche Bank price target is $210, and the Wall Street consensus target is $210.35. Shares traded early Thursday at $148.15.

Jazz Pharmaceuticals

This top company is a favorite across Wall Street. Jazz Pharmaceuticals PLC (NASDAQ: JAZZ) is a biopharmaceutical company that identifies, develops and commercializes pharmaceutical products for various medical needs in the United States, Europe and elsewhere. The company has a portfolio of products and product candidates with a focus in the areas of sleep and hematology/oncology.

The company’s largest products are Xyrem for narcolepsy (excessive daytime sleepiness), followed by Erwinaze for acute lymphoblastic leukemia and Defitelio for veno-occlusive disorder (blockage of blood vessels in liver). Many on Wall Street feel the growth opportunity from Vyxeos (expected to become new standard of care in secondary acute myeloid leukemia) and JZP-110 have the greatest upside potential.

On Wednesday the company reported that first-quarter 2018 adjusted earnings per share were 29% higher than a year ago and beat Wall Street expectations. Total revenues in the quarter rose 18% year over year, owing to higher sales of Xyrem and continued growth in demand for Vyxeos. Sales also beat the consensus estimate.

Its shares have outperformed the industry so far this year, rallying 9.6% against the industry’s 3.1% decrease.

Deutsche Bank has a $174 price target. The consensus target is $182.54, and shares traded at $156.55 Thursday.

NovoCure

This stock has been on a roll and looks ready to break out. NovoCure Ltd. (NASDAQ: NVCR) develops and commercializes treatments for solid tumor cancer therapy called the tumor treating fields (TTFields). Its markets its proprietary TTFields delivery system under the Optune name for use as a monotherapy treatment for adult patients with glioblastoma brain cancer.

NovoCure also conducts clinical trials for the use of TTFields in brain metastases, non-small cell lung cancer, pancreatic cancer, ovarian cancer and mesothelioma.

Deutsche Bank recently said:

The company reported strong patient uptake in GBM globally, Glioblastomas (GBM) are tumors that arise from astrocytes—the star-shaped cells that make up the “glue-like,” or supportive tissue of the brain. With the US contributing a majority of the increase in patient numbers combined with a strong launch in Japan. With global penetration rate at 26% (up from ~22% in 4Q17), we believe NVCR is off to a good start in 2018. We continue to view NovoCure as an interesting and largely below-the-radar oncology story, and maintain our Buy rating.

The $31 Deutsche Bank price target is in line with the $31.20 consensus target. Shares traded at $29.40.

Valeant Pharmaceuticals

This company has been fighting its way back now for over a year and may be a very solid contrarian play. Valeant Pharmaceuticals International Inc. (NYSE: VRX) operates as a multinational, specialty pharmaceutical and medical device company that develops, manufactures and markets a range of pharmaceuticals, over-the-counter (OTC) products and medical devices. The company operates through three segments: Bausch + Lomb/International, Branded Rx and U.S. Diversified Products.

Valeant Pharmaceuticals released its first-quarter earnings on Tuesday. The company said it generated revenues of $2.0 billion, compared to $2.1 billion in the first quarter of 2017. Deutsche Bank noted this in a recent research note:

The company’s Global Consumer business (~17% of revenue) represents a key value driver for the company given its potential for solid and durable growth. We use Nielsen data to track sales and unit trends for the US part of this important business. Valeant does not break out US Consumer sales, but Nielsen sales have average ~42% of the firms reported global sales over the last several quarters.

The Deutsche Bank price target is $22. The consensus target is $17.14, and shares traded at $20.20.

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There is deep value for long-term investors in these companies, and the ability to buy in to some of the best companies in the industry at rock bottom pricing. While changing sentiment can be like turning an oceanliner, when the turn comes it could mean big profits and moves in stock prices.

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