2 of Wall Street’s Favorite Stocks with Solid Fundamentals and 1 We Turn Down

October 16, 2025 at 00:40 AM EDT

SWK Cover Image

Wall Street has set ambitious price targets for the stocks in this article. While this suggests attractive upside potential, it’s important to remain skeptical because analysts face institutional pressures that can sometimes lead to overly optimistic forecasts.

At StockStory, we look beyond the headlines with our independent analysis to determine whether these bullish calls are justified. That said, here are two stocks where Wall Street’s positive outlook is supported by strong fundamentals and one where its enthusiasm might be excessive.

One Stock to Sell:

Stanley Black & Decker (SWK)

Consensus Price Target: $86.60 (27.9% implied return)

With an iconic “STANLEY” logo which has remained virtually unchanged for over a century, Stanley Black & Decker (NYSE: SWK) is a manufacturer primarily catering to the tool and outdoor equipment industry.

Why Do We Pass on SWK?

Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 8.6% annually
Free cash flow margin shrank by 10.5 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive

At $67.71 per share, Stanley Black & Decker trades at 13.6x forward P/E. To fully understand why you should be careful with SWK, check out our full research report (it’s free for active Edge members).

Two Stocks to Watch:

Magnite (MGNI)

Consensus Price Target: $28.04 (48.5% implied return)

Born from the 2020 merger of Rubicon Project and Telaria, Magnite (NASDAQ: MGNI) operates the world's largest independent sell-side advertising platform that automates the buying and selling of digital advertising inventory across all channels and formats.

Why Should You Buy MGNI?

Annual revenue growth of 33% over the last five years was superb and indicates its market share increased during this cycle
Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 22.8% outpaced its revenue gains
Robust free cash flow margin of 23.3% gives it many options for capital deployment, and its recently improved profitability means it has even more resources to invest or distribute

Magnite’s stock price of $18.89 implies a valuation ratio of 18.8x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.

Preferred Bank (PFBC)

Consensus Price Target: $106.25 (19.2% implied return)

Founded in 1991 with a focus on serving the Pacific Rim community in Southern California, Preferred Bank (NASDAQ: PFBC) is a commercial bank that provides banking products and services to small and mid-sized businesses, entrepreneurs, real estate developers, and high net worth individuals.

Why Do We Like PFBC?

Share repurchases over the last five years enabled its annual earnings per share growth of 15.4% to outpace its revenue gains
Annual tangible book value per share growth of 12.9% over the past five years was outstanding, reflecting strong capital accumulation this cycle
ROE punches in at 19%, illustrating management’s expertise in identifying profitable investments

Preferred Bank is trading at $89.14 per share, or 1.4x forward P/B. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free for active Edge members .

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 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 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

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.

Symbol	Price	Change (%)
AMZN	213.04	-1.43 (-0.67%)
AAPL	252.29	+4.84 (1.96%)
AMD	233.08	-1.48 (-0.63%)
BAC	51.28	+0.84 (1.67%)
GOOG	253.79	+1.91 (0.76%)
META	716.91	+4.84 (0.68%)
MSFT	513.58	+1.97 (0.39%)
NVDA	183.16	+1.35 (0.74%)
ORCL	291.31	-21.69 (-6.93%)
TSLA	439.31	+10.56 (2.46%)

Symbol

Price

Change (%)

AMZN

213.04

-1.43 (-0.67%)

AAPL

252.29

+4.84 (1.96%)

AMD

233.08

-1.48 (-0.63%)

BAC

51.28

+0.84 (1.67%)

GOOG

253.79

+1.91 (0.76%)

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