The SPDR S&P Biotech ETF (NYSEArca: XBI), one of the largest biotech ETFs, is getting in on the sector’s resurgence.

XBI, an equal-weight fund, is up more than 40% year-to-date and multiple catalysts are stoking the biotech rally.

“The industry’s sales and earnings growth had been slowing since 2015, putting pressure on share prices,” said State Street in a recent note. “But Wall Street is taking a new shine to the industry, and analyst earnings and sales revisions are becoming more upbeat. In the third quarter of 2017, the ratio of analyst upgrades to downgrades touched its highest level since the first quarter of 2016.”

Healthcare stocks are also showing attractive valuations relative to other defensive sectors, which are richly valued. Biotechnology historically trades at multiples that are elevated relative to broader benchmarks, but after last year’s of struggles for biotechnology names, some analysts see value with some big-name biotech stocks.

Biotech “trades more than 25% below its 15-year average based on historical and forward price-to-earnings ratios. Compared with the broader market, biotech stocks are also trading at a discount and far below their historical average,” according to State Street.

Related: Biotech, Pharma ETFs Leave Pricing Drama Behind

Showing Page 1 of 2