The stocks in this article have caught Wall Street’s attention in a big way, with price targets implying returns above 20%. But investors should take these forecasts with a grain of salt because analysts typically say nice things about companies so their firms can win business in other product lines like M&A advisory.
Luckily for you, we at StockStory have no conflicts of interest - our sole job is to help you find genuinely promising companies. Keeping that in mind, here is one stock likely to meet or exceed Wall Street’s lofty expectations and two where its enthusiasm might be excessive.
Two Stocks to Sell:
Assured Guaranty (AGO)
Consensus Price Target: $92.33 (20.5% implied return)
Serving as a financial safety net for over $11 trillion in debt service payments since its founding in 2003, Assured Guaranty (NYSE: AGO) provides credit protection products that guarantee scheduled payments on municipal bonds, infrastructure projects, and structured finance obligations.
Why Is AGO Risky?
- Insurance offerings face significant market challenges this cycle as net premiums earned contracted by 5.2% annually over the last five years
- Projected sales decline of 24% over the next 12 months indicates demand will continue deteriorating
- Performance over the past two years shows each sale was less profitable as its earnings per share dropped by 15.4% annually, worse than its revenue
Assured Guaranty’s stock price of $76.65 implies a valuation ratio of 0.6x forward P/B. Read our free research report to see why you should think twice about including AGO in your portfolio.
PennyMac Financial Services (PFSI)
Consensus Price Target: $116.29 (43% implied return)
Founded during the 2008 financial crisis to help address the mortgage market meltdown, PennyMac Financial Services (NYSE: PFSI) is a specialty financial services company that originates, services, and manages investments related to residential mortgage loans in the United States.
Why Do We Think Twice About PFSI?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 12.1% annually over the last five years
- 4% annual net interest income growth over the last five years was slower than its banking peers
- Sales were less profitable over the last five years as its earnings per share fell by 13.1% annually, worse than its revenue declines
At $81.33 per share, PennyMac Financial Services trades at 0.9x forward P/B. If you’re considering PFSI for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
ServiceNow (NOW)
Consensus Price Target: $141.86 (52.4% implied return)
Built on a single code base that processes more than 80 billion workflows and 6.5 trillion transactions annually, ServiceNow (NYSE: NOW) provides a cloud-based platform that helps organizations automate and digitize workflows across departments, from IT and HR to customer service and security.
Why Are We Backing NOW?
- Ability to secure long-term commitments with customers is evident in its 21.8% ARR growth over the last year
- Well-designed software integrates seamlessly with other workflows, enabling swift payback periods on marketing expenses and customer growth at scale
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
ServiceNow is trading at $93.10 per share, or 5.8x forward price-to-sales. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
