While often the top firms on Wall Street take a shot and advise clients to buy stocks in front of earnings, that only works when they actually beat earnings and the stock goes higher. Another outstanding way is to be patient and wait, and then buy the stocks that deliver stellar numbers.

A new research report from Cowen features three top stocks of companies that exceeded earnings estimates that the firm feels should be bought now. They are Amgen Inc. (NASDAQ: AMGN), Illumina Inc. (NASDAQ: ILMN) and Rite Aid Corp. (NYSE: RAD).

Amgen

Amgen posted outstanding earnings on Tuesday after the closing bell, and the biotech giant remains a top stock for investors to buy. The company reported first-quarter 2015 earnings of $2.48 per share, soaring above consensus estimate of $2.07 and the year-ago earnings of $1.86 per share. Total revenues increased 11.3% to $5.033 billion in the first quarter of 2015, and the stellar earnings were driven by higher revenues and lower operating expenses.

Many on Wall Street point to the company’s tremendous pipeline and outstanding forward earnings and revenue capabilities. Amgen continues to trim its gigantic workforce as it bows to activist hedge fund shareholders. One of activists is hedge fund manager Dan Loeb, whose Third Point raised its stake in Amgen in the fourth quarter to $1.7 billion from $186 million at the end of September. Loeb has been pushing the biotech giant to split into two separate companies to boost shareholder value.

ALSO READ: Deutsche Bank’s 4 Utilities Stocks to Buy Into Earnings

The Cowen analysts note that first-quarter sales were up a strong 11% despite currency headwinds, and they think that the overall revenue guidance of 6% is very conservative given the company’s outstanding earnings momentum and product launches.

Amgen shareholders are paid a 2% dividend. Cowen raised the price target from $168 to $189. The Thomson/First Call consensus price target is at $177.11, and the stock closed most recently at $169.10.

Illumina

This company develops, manufactures and markets life science tools and integrated systems for the analysis of genetic variation and function in North America, Europe, Latin America, the Asia-Pacific, the Middle East and South Africa. The products include sequencing platforms based on its SBS technology that are designed to meet the various demands of a range of sequencing applications, and array platforms consist of HiScan and iScan systems, which are array scanners that support the imaging of array-based genetic analysis products.

Ilumina is the early leader in a growing genetic sequencing market that some analysts predict could reach $20 billion annually in the near future. Ilumina has a dominant 70% market share in the industry, and its development of groundbreaking technologies, such as the $1,000 human genome, have been game changing.

ALSO READ: 5 UBS High Conviction Stocks to Buy for Volatile Markets

The stock got absolutely mauled after reporting what the Cowen team says were outstanding results. In fact, they called it a “high-quality” earnings beat, which was much better throughout the profit and loss statement. Earnings per share, revenue and margins were all better than expected. The analysts think that the bears latched onto the fact that revenue guidance was not increased. Cowen still feels the company should be able to grow revenue 25% to 30% and beat forward earnings guidance, while achieving milestones that keep the conviction in continued growth in the 20% range.

The Cowen price target is a huge $264, while the consensus target is much lower at $225.74. The stock closed Wednesday at $190.04, down almost 6%. Based on the Cowen take, aggressive investors should buy this sell-off.

Rite Aid

Rite Aid is one of the nation’s leading drugstore chains, with nearly 4,600 stores in 31 states and the District of Columbia. Many on Wall Street see the company very favorably positioned in health care given its geographic overlap with Medicaid expansion, as well as its push into clinics.

The company was in the spotlight recently as rumors had resurfaced of a possible takeover of the company by Walgreens Boot Alliance. When Walgreens reported earnings, investors started to think that perhaps the company was not looking for an acquisition, and if it was that perhaps it wasn’t Rite Aid.

The Cowen team, which never had a buyout as part of the firm’s central thesis for owning the stock, feel that with the stock down close to 10%, investors have a very attractive entry point. The analysts feel that current underlying fundamentals remain very strong and think that management 2016 guidance likely will prove conservative, with upside from the deal with McKesson and perhaps an earlier than expected close of EnvisionRx acquisition.

The Cowen price target is a strong $12, and the consensus target is much lower at $10. The shares closed Wednesday at $8.32. Trading to the Cowen target would be an outstanding 45% gain for shareholders.

ALSO READ: 5 Cheap Large Cap Stocks to Buy in a Pricey Stock Market

What the Cowen analysts have are stocks in which any sort of earnings overhang is out of the way, at least for this quarter. Investors looking for new ideas in a pricey market may want to look at one of all of these as good addition to an aggressive growth portfolio.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.