Jazz Pharmaceuticals (JAZZ) delivered a strong Q2 as Xywav continued to outperform despite generic competition, prompting another increase in the company's full-year outlook, Morgan Stanley said in a research note Tuesday.

The investment firm said the increase reflects strong first hald execution and expected double-digit growth from Xywav and the combined epilepsy and oncology franchises.

The company's management said the slower-than-expected uptake of high-sodium generic competitors was a key reason for raising full-year guidance and expressed increased confidence in Xywav's long-term competitive position.

Morgan Stanley said Ziihera remains Jazz Pharmaceuticals' most important oncology growth driver. Management reiterated confidence ahead of the Aug. 25 PDUFA date for Ziihera as a first-line treatment for HER2-positive gastric and gastroesophageal adenocarcinoma and said interactions with the US FDA have been productive.

The investment firm raised Jazz's full-year 2026 revenue estimate to $4.77 billion from $4.47 billion. It also increased non-GAAP EPS estimates to $25.14 for 2026 and $28.85 for 2027 from $24.99 and $27.28.

Morgan Stanley has an overweight rating on Jazz Pharmaceuticals and raised its price target to $280 from $245.

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