After an outstanding 2014, the health care sector could be primed for yet another solid performance in 2015. While many analysts on Wall Street are very positive on the group, most agree that the returns most likely will not reach the 20% plus level that investors saw this year. In a new research report, the SunTrust Robinson Humphrey team highlights the top pharmaceutical stocks to buy for 2015.

The analysts at SunTrust believe that deals could continue to drive pharmaceutical momentum. They also are of the opinion that pharmaceuticals will outperform in 2015, driven by new product innovation and a very attractive five-year growth rate. They also note the group as a whole is under-owned as a percentage of the S&P 500.

SunTrust’s top pharmaceutical stocks to buy for 2015 include Merck & Co. Inc. (NYSE: MRK), Bristol-Myers Squibb Co. (NYSE: BMY), Eli Lilly & Co. (NYSE: LLY), Shire PLC (NASDAQ: SHPG) and Flamel Technologies Ltd. (NASDAQ: FLML).

Merck

Shares of this top pharmaceutical pick at SunTrust for 2015 have enjoyed a solid year for investors, up more than 15%. Merck also remains a leading health care company that is on the focus lists of many of the top firms we cover. The company’s numerous prescription medicines, vaccines, biologic therapies and consumer care and animal health products are provided to customers in more than 140 countries.

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Many Wall Street analysts feel that Merck’s purchase of Idenix this past summer for $3.85 billion to acquire its hepatitis C pipeline could pay off huge for investors in the future. They also note that the recent purchase of Cubist Pharmaceuticals, which puts Merck firmly in the antibiotic category, should be closed by the first quarter of next year.

The pharmaceutical giant pays shareholders a very solid 3.1% dividend. The SunTrust price target for the stock is $80. The Thomson/First Call consensus price target is $63.92. Merck closed Friday at $57.78 a share.

Bristol-Myers Squibb

The SunTrust team feels this stock could have multiple clinical catalysts in 2015. They point to the company looking for approval for its Daklinza drug, which has already been approved in Europe for treatment of hepatitis C. The drug is effective across several genotypes of diseases and has shown cure rates of up to 100% when used in combination with Gilead Sciences’ blockbuster drug Sovaldi.

Bristol Myers investors are paid a 2.5% dividend. The SunTrust target price is $64. The consensus target is $57.21, but note the stock closed Friday at $59.58.

Eli Lilly

Eli Lilly is another top drug stock to buy at SunTrust for 2015. Some of the more negative coverage from Wall Street recently may have been too focused on patent expirations, which has kept enthusiasm on the stock muted. The SunTrust team see the company giving Wall Street a strategy update and issuing 2015 financial targets when it holds an analysts call on January 7. With multiple clinical trials on the burner, it could be a catalyst that drives the stock higher.

Eli Lilly investors are paid a 2.8% dividend. The SunTrust price target is posted at $80, and the consensus target is $70.63, just above Friday’s close at $70.39.

Shire

This one is the SunTrust’s analysts top pick in specialty pharmaceuticals. The stock was absolutely destroyed back in the fall when AbbVie made it clear with tax inversion benefits gone that they wanted out of the planned acquisition of the company. Shire had repositioned its business in 2013, undertaking a realignment program with strategic focus on rare diseases and greater operational discipline. Shire has drugs for ulcerative colitis and hereditary angioedema in its portfolio. It also has top-selling Adderall XR for the treatment of ADHD.

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Disappointed arbitrage accounts blew the stock out at a furious pace back in the fall, and the stock dropped at one point more than $100. Despite the deal disappointment, Shire remains a quality pharmaceutical holding, and it may very well once again become an acquisition candidate. The SunTrust team highlights a host of clinical trials that could prove positive for the company.

Shire investors are paid a small 0.3% dividend. The SunTrust price target is $242, and the consensus price target, which may be reset as the acquisition is over, is $226.57. The stock closed Friday at $212.88.

Flamel Technologies

This lesser known stock could prove solid for more aggressive investors. The company has a proprietary pipeline of niche specialty pharmaceutical products, while its drug delivery platforms are focused on the goal of developing safer, more efficacious formulations of drugs to address unmet medical needs. Flamel’s pipeline includes chemical and biological drugs formulated with its Micropump technology, the development of liquid formulations with LiquiTime, the abuse-deterrent formulation Trigger Lock, in addition to the Medusa proprietary drug delivery platforms. The SunTrust analysts see Trigger Lock Ph-1 PK data in the first half of 2015.

The SunTrust price target is $29, and the consensus target is lower at $25. Shares closed on Friday at $17.11.

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Given the markets’ huge 2014 run, more conservative accounts may want to take profits and focus on the more defensive pharmaceutical stocks. While they may not have the big upside of momentum stocks, they surely do not have the downside in a big market sell-off.

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