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.
Unlike the investment banks, we created StockStory to provide independent analysis that helps you determine which companies are truly worth following. 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:
Gates Industrial Corporation (GTES)
Consensus Price Target: $27.92 (25.8% implied return)
Helping create one of the most memorable moments for the iconic “Jurassic Park” film, Gates (NYSE: GTES) offers power transmission and fluid transfer equipment for various industries.
Why Do We Think Twice About GTES?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Projected sales growth of 3.6% for the next 12 months suggests sluggish demand
- Low returns on capital reflect management’s struggle to allocate funds effectively
At $22.20 per share, Gates Industrial Corporation trades at 14.3x forward P/E. Check out our free in-depth research report to learn more about why GTES doesn’t pass our bar.
Chemed (CHE)
Consensus Price Target: $574.25 (32.6% implied return)
With a unique business model combining end-of-life care and household services, Chemed (NYSE: CHE) operates two distinct businesses: VITAS, which provides hospice care for terminally ill patients, and Roto-Rooter, which offers plumbing and water restoration services.
Why Does CHE Fall Short?
- Underwhelming billable days over the past two years imply it may need to invest in improvements to get back on track
- Day-to-day expenses have swelled relative to revenue over the last five years as its adjusted operating margin fell by 4.3 percentage points
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
Chemed’s stock price of $433.11 implies a valuation ratio of 17.4x forward P/E. Read our free research report to see why you should think twice about including CHE in your portfolio.
One Stock to Watch:
Marvell Technology (MRVL)
Consensus Price Target: $116.58 (32.6% implied return)
Moving away from a low margin storage device management chips in one of the biggest semiconductor business model pivots of the past decade, Marvell Technology (NASDAQ: MRVL) is a fabless designer of special purpose data processing and networking chips used by data centers, communications carriers, enterprises, and autos.
Why Does MRVL Stand Out?
- Annual revenue growth of 22% over the last five years was superb and indicates its market share increased during this cycle
- Operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
- Free cash flow margin expanded by 8 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
Marvell Technology is trading at $87.93 per share, or 25.2x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
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).
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