When Wall Street turns bearish on a stock, it’s worth paying attention. These calls stand out because analysts rarely issue grim ratings on companies for fear their firms will lose out in other business lines such as M&A advisory.
Accurately determining a company’s long-term prospects isn’t easy, especially when sentiment is weak. That’s where StockStory comes in - to help you find attractive investment candidates backed by unbiased research. That said, here are two stocks poised to prove Wall Street wrong and one where the outlook is warranted.
One Stock to Sell:
WaFd Bank (WAFD)
Consensus Price Target: $31 (-3.5% implied return)
Founded in 1917 and rebranded from Washington Federal in 2023, WaFd (NASDAQ: WAFD) is a bank holding company that provides lending, deposit services, and insurance through its Washington Federal Bank subsidiary across eight western states.
Why Should You Sell WAFD?
- Net interest income trends were unexciting over the last five years as its 6.9% annual growth was below the typical banking firm
- Net interest margin dropped by 76 basis points (100 basis points = 1 percentage point) over the last two years, implying the firm’s loan book profitability fell as competitors entered the market
- Earnings per share decreased by more than its revenue over the last two years, showing each sale was less profitable
At $32.12 per share, WaFd Bank trades at 0.8x forward P/B. Check out our free in-depth research report to learn more about why WAFD doesn’t pass our bar.
Two Stocks to Watch:
Universal Health Services (UHS)
Consensus Price Target: $248.71 (1.2% 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 Stand Out?
- Revenue base of $16.99 billion gives it economies of scale and some negotiating power
- Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Free cash flow margin jumped by 6.9 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
Universal Health Services is trading at $245.75 per share, or 10.6x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
Federated Hermes (FHI)
Consensus Price Target: $52.43 (5% implied return)
With roots dating back to 1955 and a pioneering role in money market funds, Federated Hermes (NYSE: FHI) is an investment management firm that offers a wide range of funds and strategies for institutional and individual investors.
Why Could FHI Be a Winner?
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 22.7% exceeded its revenue gains over the last two years
- Industry-leading 25% return on equity demonstrates management’s skill in finding high-return investments
Federated Hermes’s stock price of $49.91 implies a valuation ratio of 10.1x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. 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 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 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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