RBC Capital names top healthcare stocks as sector upgraded to overweight

Investing.com -- RBC Capital has upgraded the Healthcare sector to Overweight from Market Weight, identifying 11 high-conviction stock ideas across therapeutics and non-therapeutics segments. The upgrade is supported by improving flows, positive earnings and sales revision profiles, and attractive valuations. RBC Head of Equity Strategy Lori Calvasina noted that Healthcare historically moves inversely to Technology’s relative performance versus the S&P 500, making it a natural destination when reducing Tech exposure. The sector also scored favorably in risk factor assessments, including scenarios involving rising 10-year yields and a weakening AI theme.

Eli Lilly (LLY)

RBC’s preferred pharmaceutical name with approximately 30% upside to its $1,500 price target. The firm expects a beat-and-raise for third-quarter results and views the December 7 pipeline event as a key catalyst highlighting underappreciated Phase 2/3 readouts expected next year. At 24 times one-year forward price-to-earnings ratio, RBC believes the market is not pricing in leading sales growth of 15% and earnings per share growth of 21% through 2030. LLY is an RBC Global Top 30 high conviction idea with an Outperform rating.

argenx (ARGX)

Despite recent October readout setbacks, RBC views the sell-off as overdone and sees a buying opportunity. The firm highlights few biotech companies with approximately $6 billion in top-line revenue likely growing to $10 billion before decade’s end, with 20 Phase II/III trials ongoing. Outperform rating with $1,100 price target.

Revolution Medicines (RVMD)

The company is positioned strongly with physician enthusiasm for the Rasonque launch. With shares approximately 15% off highs, RBC remains confident in the high-quality launch and pipeline story with more value to be unlocked. Outperform rating with $260 price target.

Biogen (BIIB)

A top pick entering a catalyst-rich period in high-value immunology indications. Near-term phase III data for litifilimab in SLE in fourth-quarter 2026 represents a re-rating opportunity. BIIB is an RBC Global Top 30 high conviction idea with Outperform rating and $256 price target.

Ascendis (ASND)

Extensive checks suggest Yorvipath could be a €3 billion-plus drug, with the company now profitable and launching a drug for a sizable indication with little competition. Outperform rating with $290 price target.

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