Wall Street is overwhelmingly bullish on the stocks in this article, with price targets suggesting significant upside potential. However, it’s worth remembering that analysts rarely issue sell ratings, partly because their firms often seek other business from the same companies they cover.
At StockStory, we look beyond the headlines with our independent analysis to determine whether these bullish calls are justified. Keeping that in mind, here are three stocks where Wall Street’s estimates seem disconnected from reality and some better opportunities to consider.
GATX (GATX)
Consensus Price Target: $187.75 (17.4% implied return)
Originally founded to ship beer, GATX (NYSE: GATX) provides leasing and management services for railcars and other transportation assets globally.
Why Does GATX Give Us Pause?
- Performance surrounding its active railcars has lagged its peers
- Negative free cash flow raises questions about the return timeline for its investments
- Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
GATX’s stock price of $159.93 implies a valuation ratio of 16.7x forward P/E. Dive into our free research report to see why there are better opportunities than GATX.
Covenant Logistics (CVLG)
Consensus Price Target: $29.67 (48.8% implied return)
Started with 25 trucks and 50 trailers, Covenant Logistics (NASDAQ: CVLG) is a provider of expedited long haul freight services, offering a range of logistics solutions.
Why Should You Dump CVLG?
- Sales were flat over the last two years, indicating it’s failed to expand this cycle
- 12.3 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
- Waning returns on capital imply its previous profit engines are losing steam
At $19.94 per share, Covenant Logistics trades at 11x forward P/E. Check out our free in-depth research report to learn more about why CVLG doesn’t pass our bar.
Hercules Capital (HTGC)
Consensus Price Target: $20.94 (16.5% implied return)
Named after the mythological hero known for his strength, Hercules Capital (NYSE: HTGC) is a business development company that provides debt financing to venture capital-backed and growth-stage technology and life sciences companies.
Why Is HTGC Not Exciting?
- Earnings per share fell by 1.8% annually over the last two years while its revenue grew, showing its incremental sales were much less profitable
Hercules Capital is trading at $17.98 per share, or 9x forward P/E. To fully understand why you should be careful with HTGC, check out our full research report (it’s free for active Edge members).
Stocks We Like More
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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