The stocks in this article have caught Wall Street’s attention in a big way, with price targets implying returns above 20%. But investors should take these forecasts with a grain of salt because analysts typically say nice things about companies so their firms can win business in other product lines like M&A advisory.
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 positive outlook is supported by strong fundamentals and two where its enthusiasm might be excessive.
Two Stocks to Sell:
Steelcase (SCS)
Consensus Price Target: $16.67 (62.9% implied return)
Founded in 1912 when metal office furniture was replacing wooden alternatives, Steelcase (NYSE: SCS) is a global office furniture manufacturer that designs and produces workplace solutions including desks, chairs, architectural products, and services.
Why Are We Out on SCS?
- Annual sales declines of 3.2% for the past five years show its products and services struggled to connect with the market during this cycle
- Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
Steelcase’s stock price of $10.23 implies a valuation ratio of 9.4x forward P/E. If you’re considering SCS for your portfolio, see our FREE research report to learn more.
Universal Health Services (UHS)
Consensus Price Target: $225.40 (31.6% implied return)
With a network spanning 39 states and three countries, Universal Health Services (NYSE: UHS) operates acute care hospitals and behavioral health facilities across the United States, United Kingdom, and Puerto Rico.
Why Does UHS Fall Short?
- Annual sales growth of 7.1% over the last five years lagged behind its healthcare peers as its large revenue base made it difficult to generate incremental demand
- Lagging comparable store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 3.1 percentage points
At $171.24 per share, Universal Health Services trades at 8.6x forward P/E. Dive into our free research report to see why there are better opportunities than UHS.
One Stock to Watch:
BioMarin Pharmaceutical (BMRN)
Consensus Price Target: $95.91 (71.6% implied return)
Pioneering treatments for conditions that often had no previous therapeutic options, BioMarin Pharmaceutical (NASDAQ: BMRN) develops and commercializes therapies that address the root causes of rare genetic disorders, particularly those affecting children.
Why Does BMRN Stand Out?
- Annual revenue growth of 16.5% over the last two years was superb and indicates its market share increased during this cycle
- Additional sales over the last five years increased its profitability as the 22.8% annual growth in its earnings per share outpaced its revenue
- Free cash flow margin grew by 14.9 percentage points over the last five years, giving the company more chips to play with
BioMarin Pharmaceutical is trading at $55.90 per share, or 12.4x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 9 Market-Beating Stocks. 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
