Wall Street’s bearish price targets for the stocks in this article signal serious concerns. Such forecasts are uncommon in an industry where maintaining cordial corporate relationships often trumps delivering the hard truth.
At StockStory, we look beyond the headlines with our independent analysis to determine whether these bearish calls are justified. That said, here is one stock where Wall Street’s pessimism is creating a buying opportunity and two where the skepticism is well-placed.
Two Stocks to Sell:
Sherwin-Williams (SHW)
Consensus Price Target: $374.81 (1.2% implied return)
Widely known for its success in the paint industry, Sherwin-Williams (NYSE: SHW) is a manufacturer of paints, coatings, and related products.
Why Are We Wary of SHW?
- 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 2.5% for the next year implies demand will be shaky
- 7.6 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
Sherwin-Williams’s stock price of $370.36 implies a valuation ratio of 29.4x forward P/E. Read our free research report to see why you should think twice about including SHW in your portfolio.
Wells Fargo (WFC)
Consensus Price Target: $86.96 (11.5% implied return)
Founded during the California Gold Rush in 1852 to provide banking and express delivery services to miners and merchants, Wells Fargo (NYSE: WFC) is a diversified financial services company that provides banking, lending, investment, and wealth management services to individuals and businesses.
Why Is WFC Not Exciting?
- Large revenue base makes it harder to expand quickly, and its annual net interest income growth of 1.8% over the last five years was below our standards for the banking sector
- Anticipated net interest income growth of 5.1% for the next year implies demand will be shaky
- 36.7 basis point (100 basis points = 1 percentage point) decline in its net interest margin over the last two years reflects the firm’s willingness to accept lower profitability to defend its market position
Wells Fargo is trading at $78.02 per share, or 1.5x forward P/B. To fully understand why you should be careful with WFC, check out our full research report (it’s free).
One Stock to Buy:
Stride (LRN)
Consensus Price Target: $163.75 (3.4% implied return)
Formerly known as K12, Stride (NYSE: LRN) is an education technology company providing education solutions through digital platforms.
Why Will LRN Outperform?
- Rise in enrollments indicates high demand for its offerings
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 56.8% over the last two years outstripped its revenue performance
- Free cash flow margin grew by 8.6 percentage points over the last five years, giving the company more chips to play with
At $158.35 per share, Stride trades at 20.2x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out 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-small-cap company Comfort Systems (+782% 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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