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3 of Wall Street’s Favorite Stocks We Think Twice About

BBWI Cover Image

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.

Luckily for you, we at StockStory have no conflicts of interest - our sole job is to help you find genuinely promising companies. Keeping that in mind, here are three stocks where Wall Street’s enthusiasm may be misplaced and some other investments worth exploring instead.

Bath and Body Works (BBWI)

Consensus Price Target: $40.67 (54.1% implied return)

Spun off from L Brands in 2020, Bath & Body Works (NYSE: BBWI) is a personal care and home fragrance retailer where consumers can find specialty shower gels, scented candles for the home, and lotions.

Why Is BBWI Not Exciting?

  1. Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
  2. Estimated sales growth of 2.6% for the next 12 months implies demand will slow from its six-year trend
  3. Earnings per share lagged its peers over the last six years as they only grew by 8.5% annually

At $26.39 per share, Bath and Body Works trades at 7.3x forward P/E. Check out our free in-depth research report to learn more about why BBWI doesn’t pass our bar.

Yum China (YUMC)

Consensus Price Target: $58.48 (33.5% implied return)

One of China’s largest restaurant companies, Yum China (NYSE: YUMC) is an independent entity spun off from Yum! Brands in 2016.

Why Are We Hesitant About YUMC?

  1. Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
  2. Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 4.8%
  3. Gross margin of 20.1% is below its competitors, leaving less money for marketing and promotions

Yum China’s stock price of $43.80 implies a valuation ratio of 16x forward P/E. Read our free research report to see why you should think twice about including YUMC in your portfolio.

Stratasys (SSYS)

Consensus Price Target: $13.33 (34.6% implied return)

Born from the Founder’s idea of making a toy frog with a glue gun, Stratasys (NASDAQ: SSYS) offers 3D printers and related materials, software, and services to many industries.

Why Should You Sell SSYS?

  1. Sales stagnated over the last five years and signal the need for new growth strategies
  2. Poor expense management has led to operating margin losses
  3. Negative free cash flow raises questions about the return timeline for its investments

Stratasys is trading at $9.90 per share, or 26.8x forward P/E. If you’re considering SSYS for your portfolio, see our FREE research report to learn more.

Stocks We Like More

Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

Take advantage of the rebound by checking out our Top 5 Growth Stocks for this month. 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 Tecnoglass (+1,754% 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

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.

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