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.
Unlike the investment banks, we created StockStory to provide independent analysis that helps you determine which companies are truly worth following. That said, here is one stock where Wall Street’s positive outlook is supported by strong fundamentals and two where consensus estimates seem disconnected from reality.
Two Stocks to Sell:
Victoria's Secret (VSCO)
Consensus Price Target: $65.78 (43.3% implied return)
Spun off from L Brands in 2020, Victoria’s Secret (NYSE: VSCO) is an intimate clothing and beauty retailer that sells its own brands of lingerie, undergarments, and personal fragrances.
Why Are We Hesitant About VSCO?
- Muted 1.1% annual revenue growth over the last three years shows its demand lagged behind its consumer retail peers
- Subpar operating margin of 4.5% constrains its ability to invest in process improvements or effectively respond to new competitive threats
- Earnings per share fell by 16.2% annually over the last three years while its revenue grew, showing its incremental sales were much less profitable
Victoria's Secret’s stock price of $45.89 implies a valuation ratio of 13.4x forward P/E. Read our free research report to see why you should think twice about including VSCO in your portfolio.
ESAB (ESAB)
Consensus Price Target: $136 (53.5% implied return)
Having played a significant role in the construction of the iconic Sydney Opera House, ESAB (NYSE: ESAB) manufactures and sells welding and cutting equipment for numerous industries.
Why Does ESAB Give Us Pause?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Anticipated sales growth of 6.5% for the next year implies demand will be shaky
- Earnings per share lagged its peers over the last two years as they only grew by 7.5% annually
ESAB is trading at $88.60 per share, or 15.3x forward P/E. Dive into our free research report to see why there are better opportunities than ESAB.
One Stock to Buy:
Instacart (CART)
Consensus Price Target: $50.19 (27.2% implied return)
Powering more than one billion grocery orders since its founding, Instacart (NASDAQ: CART) is an online grocery shopping and delivery platform that partners with retailers to help customers shop from local stores through its app or website.
Why Are We Bullish on CART?
- Superior platform functionality and low servicing costs result in a stellar gross margin of 74.1%
- Excellent EBITDA margin of 28.3% highlights the efficiency of its business model, and its operating leverage amplified its profits over the last few years
- Free cash flow margin jumped by 12.5 percentage points over the last few years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
At $39.46 per share, Instacart trades at 7x forward EV/EBITDA. Is now the right time to buy? 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 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
