Mallinckrodt PLC (NYSE: MNK) has been a prominent player in the health care industry and while most analysts are taking a middle-of-the-road approach to the company, one has come out with a very bullish report.

Canaccord Genuity recently had the opportunity to take Mallinckrodt CEO Mark Trudeau, COO Frank Scholz and IRO Dan Speciale to meet investors and came away from the meetings largely positive on the company’s near-term prospects as management continues to execute with the core business and sets the Acthar franchise up for potential stability and growth moving forward.

Based on these conversations, the brokerage firm upgraded Mallinckrodt to a Buy rating with a $40 price target, implying 28% of upside from the current price level.

The firm had six key takeaways from the meeting which were as follows:

1) Challenges to Inomax won’t erode the entire franchise. We see any launch from Praxair with a competing nitric oxide brand coming only after the current patent appeal is resolved in 2H/19. Even with a launch, the Praxair product will be another brand and will likely be inferior to Mallinckrodt’s next-generation system with smaller bottles and increased portability.

2) There’s no rush to a fire sale for the generics business. Mallinckrodt has until May 2019 to dispose of the generics unit and even then accounting rules are squishy if the company is in active talks regarding a disposal. It’s important to note that there are more than just finished dose opioids in the generics disposal group. Around 50% of the business is API and 50% of API is acetaminophen.

3) Acthar is emerging from recent challenges in a position of strength. We’re now annualizing recent payer challenges and expect easier y/y comps moving forward and Mallinckrodt expects the Acthar franchise to post over $1 billion in revenue in 2019.

4) Don’t underestimate the pipeline. There’s a number of upcoming data reads for CPP-1X/sulindac (1H/19 and terlipressin (2H/19) as well as pivotal progression for Stratagraft, Xenon Gas and the Ocera HE products in 2019.

5) We’ve been conservative on expense modeling post-Ofirmev and there’s strategic optionality around the Amitiza income stream. We’ve been modeling a relatively flat SG&A spend in with the loss of Ofirmev and failed to account for the company’s purposeful move away from the acute care space into the critical care space. As such, we think Mallinckrodt can adjust expenses (mostly in SG&A) to mute the bottom line impact from the Ofirmev LOE, quickly returning to EPS growth following the loss of the franchise.

6) Mallinckrodt shares trade at group lows. With debt under control, clarity for the business and pipeline optionality, should that be the case? Despite a significant revaluation of MNK shares over the past several months, the company still trades at group lows on an EV/EBITDA basis.

Shares of Mallinckrodt were last seen up 1.5% at $31.32, with a consensus analyst price target of $31.00 and a 52-week range of $11.65 to $36.65.

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