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. That said, here is one stock likely to meet or exceed Wall Street’s lofty expectations and two where analysts may be overlooking some important risks.
Two Stocks to Sell:
Burlington (BURL)
Consensus Price Target: $317.48 (26% implied return)
Founded in 1972 as a discount coat and outerwear retailer, Burlington Stores (NYSE: BURL) is now an off-price retailer that has broadened into general apparel, footwear, and home goods.
Why Does BURL Fall Short?
- Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 8% for the last six years
- Capital intensity has ramped up over the last year as its free cash flow margin decreased by 7.5 percentage points
- ROIC of 8.5% reflects management’s challenges in identifying attractive investment opportunities
Burlington is trading at $251.90 per share, or 26.3x forward P/E. Dive into our free research report to see why there are better opportunities than BURL.
Fidelis Insurance (FIHL)
Consensus Price Target: $19.67 (24.9% implied return)
Founded in Bermuda in 2014 and designed to adapt nimbly to evolving market conditions, Fidelis Insurance (NYSE: FIHL) is a global specialty insurer and reinsurer that provides customized coverage across property, specialty, and bespoke risk solutions.
Why Are We Wary of FIHL?
- Expenses have increased as a percentage of revenue over the last two years as its combined ratio fell by 55.6 percentage points
- Earnings per share fell by 41.7% annually over the last two years while its revenue grew, showing its incremental sales were much less profitable
Fidelis Insurance’s stock price of $15.75 implies a valuation ratio of 0.6x forward P/B. To fully understand why you should be careful with FIHL, check out our full research report (it’s free).
One Stock to Watch:
WD-40 (WDFC)
Consensus Price Target: $277.50 (24% implied return)
Short for “Water Displacement perfected on the 40th try”, WD-40 (NASDAQ: WDFC) is a renowned American consumer goods company known for its iconic and versatile spray, WD-40 Multi-Use Product.
Why Should WDFC Be on Your Watchlist?
- Products command premium prices and lead to a top-tier gross margin of 53.8%
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
- Stellar returns on capital showcase management’s ability to surface highly profitable business ventures
At $223.78 per share, WD-40 trades at 37.6x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like 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 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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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