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. Keeping that in mind, here is one stock where Wall Street’s excitement appears well-founded and two where consensus estimates seem disconnected from reality.

Two Stocks to Sell:

Kimberly-Clark (KMB)

Consensus Price Target: $128.63 (24.6% implied return)

Originally founded as a Wisconsin paper mill in 1872, Kimberly-Clark (NYSE: KMB) is now a household products powerhouse known for personal care and tissue products.

Why Is KMB Not Exciting?

1. 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
2. Projected sales growth of 2.1% for the next 12 months suggests sluggish demand
3. Free cash flow margin shrank by 6.3 percentage points over the last year, suggesting the company is consuming more capital to stay competitive

At $103.25 per share, Kimberly-Clark trades at 13.3x forward P/E. Dive into our free research report to see why there are better opportunities than KMB.

Belden (BDC)

Consensus Price Target: $143.60 (23.4% implied return)

With its enamel-coated copper wire used in WWI for the Allied forces, Belden (NYSE: BDC) designs, manufactures, and sells electronic components to various industries.

Why Does BDC Give Us Pause?

1. Flat sales over the last two years suggest it must find different ways to grow during this cycle
2. Earnings per share lagged its peers over the last two years as they only grew by 1.8% annually
3. Diminishing returns on capital suggest its earlier profit pools are drying up

Belden is trading at $116.36 per share, or 15.2x forward P/E. Read our free research report to see why you should think twice about including BDC in your portfolio.

One Stock to Watch:

Guidewire Software (GWRE)

Consensus Price Target: $268.38 (22.4% implied return)

With its systems powering the operations of hundreds of insurance brands across 42 countries, Guidewire Software (NYSE: GWRE) provides a technology platform that helps property and casualty insurance companies manage their core operations, digital engagement, and analytics.

Why Does GWRE Stand Out?

1. Winning new contracts that can potentially increase in value as its billings growth has averaged 21.2% over the last year
2. Well-designed software integrates seamlessly with other workflows, enabling swift payback periods on marketing expenses and customer growth at scale
3. Robust free cash flow margin of 23.3% gives it many options for capital deployment

Guidewire Software’s stock price of $219.21 implies a valuation ratio of 13.6x forward price-to-sales. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free for active Edge members .

High-Quality Stocks for All Market Conditions

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