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.
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 three stocks where Wall Street’s enthusiasm may be misplaced and some other investments worth exploring instead.
Norwegian Cruise Line (NCLH)
Consensus Price Target: $31.21 (35.7% implied return)
With amenities like a full go-kart race track built into its ships, Norwegian Cruise Line (NYSE: NCLH) is a premier global cruise company.
Why Does NCLH Worry Us?
- Demand for its offerings was relatively low as its number of passenger cruise days has underwhelmed
- Negative free cash flow raises questions about the return timeline for its investments
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
At $23.00 per share, Norwegian Cruise Line trades at 9.8x forward P/E. If you’re considering NCLH for your portfolio, see our FREE research report to learn more.
The Toro Company (TTC)
Consensus Price Target: $92.60 (24.9% implied return)
Ceasing all production to support the war effort during World War II, Toro (NYSE: TTC) offers outdoor equipment for residential, commercial, and agricultural use.
Why Are We Out on TTC?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 2.4% annually over the last two years
- Free cash flow margin shrank by 5.6 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- Eroding returns on capital suggest its historical profit centers are aging
The Toro Company is trading at $74.14 per share, or 16.2x forward P/E. To fully understand why you should be careful with TTC, check out our full research report (it’s free for active Edge members).
Verizon (VZ)
Consensus Price Target: $48.89 (20.3% implied return)
Formed in 1984 as Bell Atlantic after the breakup of Bell System into seven companies, Verizon (NYSE: VZ) is a telecom giant providing a range of communications and internet services.
Why Should You Dump VZ?
- Customer additions have disappointed over the past two years, indicating the company’s value proposition may not be resonating
- Estimated sales growth of 2.1% for the next 12 months is soft and implies weaker demand
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Verizon’s stock price of $40.65 implies a valuation ratio of 8.5x forward P/E. If you’re considering VZ for your portfolio, see our FREE research report to learn more.
Stocks We Like More
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 6 Stocks for this week. 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 Tecnoglass (+1,754% 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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