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.
Luckily for you, we at StockStory have no conflicts of interest - our sole job is to help you find genuinely promising companies. That said, here is one stock where Wall Street’s excitement appears well-founded and two where its enthusiasm might be excessive.
Two Stocks to Sell:
Allegro MicroSystems (ALGM)
Consensus Price Target: $38.58 (40.3% implied return)
The result of a spinoff from Sanken in Japan, Allegro MicroSystems (NASDAQ:ALGM) is a designer of power management chips and distance sensors used in electric vehicles and data centers.
Why Are We Hesitant About ALGM?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 14.2% annually over the last two years
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 15.6% annually
- Weak free cash flow margin of 7.8% has deteriorated further over the last five years as its investments increased
Allegro MicroSystems is trading at $27.50 per share, or 36.5x forward P/E. Read our free research report to see why you should think twice about including ALGM in your portfolio.
MetLife (MET)
Consensus Price Target: $92.40 (19.7% implied return)
Founded in 1863 by a group of New York businessmen during the Civil War era, MetLife (NYSE:MET) is a global financial services company that provides insurance, annuities, employee benefits, and asset management services to individuals and businesses worldwide.
Why Should You Dump MET?
- Net premiums earned only expanded by 2.6% annually over the last five years, trailing its insurance peers as its scale limited incremental business
- Earnings per share lagged its peers over the last two years as they only grew by 10% annually
- Annual book value per share declines of 11.6% for the past five years show its capital management struggled during this cycle
MetLife’s stock price of $77.18 implies a valuation ratio of 2x forward P/B. Dive into our free research report to see why there are better opportunities than MET.
One Stock to Buy:
Shift4 (FOUR)
Consensus Price Target: $96.67 (35.8% implied return)
Starting as a payment gateway provider in 1999 and now processing over $200 billion in annual payment volume, Shift4 Payments (NYSE:FOUR) provides integrated payment processing solutions and software that help businesses accept and manage transactions across in-store, online, and mobile channels.
Why Is FOUR a Top Pick?
- Annual revenue growth of 27.2% over the last two years was superb and indicates its market share increased during this cycle
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 40.2% annually, topping its revenue gains
- Acceptable return on equity suggests management generated shareholder value by investing in profitable projects
At $71.19 per share, Shift4 trades at 11.7x forward P/E. Is now the time to initiate a position? Find out in our full 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 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-small-cap company Comfort Systems (+782% 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
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