2 of Wall Street’s Favorite Stocks with Promising Prospects and 1 to Think Twice About

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. Keeping that in mind, here are two stocks where Wall Street’s positive outlook is supported by strong fundamentals and one where analysts may be overlooking some important risks.

One Stock to Sell:

Teledyne (TDY)

Consensus Price Target: $540.58 (23.2% implied return)

Playing a role in mapping the ocean floor as we know it today, Teledyne (NYSE:TDY) offers digital imaging and instrumentation products for various industries.

Why Is TDY Not Exciting?

1. Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
2. Earnings growth underperformed the sector average over the last two years as its EPS grew by just 4.2% annually
3. Low returns on capital reflect management’s struggle to allocate funds effectively, and its falling returns suggest its earlier profit pools are drying up

At $459.91 per share, Teledyne trades at 21.4x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than TDY.

Two Stocks to Watch:

Adobe (ADBE)

Consensus Price Target: $560.17 (46.7% implied return)

One of the most well-known Silicon Valley software companies around, Adobe (NASDAQ:ADBE) is a leading provider of software as service in the digital design and document management space.

Why Do We Like ADBE?

1. Prominent and differentiated software culminates in a best-in-class gross margin of 89.2%
2. Excellent operating margin of 36.3% highlights the efficiency of its business model, and its rise over the last year was fueled by some leverage on its fixed costs
3. Robust free cash flow margin of 41.7% gives it many options for capital deployment

Adobe is trading at $350.89 per share, or 6.4x forward price-to-sales. Is now a good time to buy? Find out in our full research report, it’s free.

Braze (BRZE)

Consensus Price Target: $51.53 (75.7% implied return)

Founded in 2011 after the co-founders met at NYC Disrupt Hackathon, Braze (NASDAQ:BRZE) is a customer engagement software platform that allows brands to connect with customers through data-driven and contextual marketing campaigns.

Why Are We Fans of BRZE?

1. Customers view its software as mission-critical to their operations as its ARR has averaged 26.8% growth over the last year
2. Net revenue retention rate of 114% demonstrates its ability to expand within existing accounts through upsells and cross-sells
3. Operating margin expanded by 10.1 percentage points over the last year as it scaled and became more efficient

Braze’s stock price of $30.31 implies a valuation ratio of 4.5x forward price-to-sales. Is now the time to initiate a position? See for yourself in our full research report, it’s free.

Stocks We Like Even More

The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.

While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking 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 175% over the last five years.

Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free.