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 positive outlook is supported by strong fundamentals and two where its enthusiasm might be excessive.
Two Stocks to Sell:
Central Garden & Pet (CENT)
Consensus Price Target: $48 (24.7% implied return)
Enhancing the lives of both pets and homeowners, Central Garden & Pet (NASDAQ: CENT) is a leading producer and distributor of essential products for pet care, lawn and garden maintenance, and pest control.
Why Does CENT Fall Short?
- Products have few die-hard fans as sales have declined by 1% annually over the last three years
- Projected sales decline of 8.2% over the next 12 months indicates demand will continue deteriorating
- ROIC of 7.8% reflects management’s challenges in identifying attractive investment opportunities
At $38.49 per share, Central Garden & Pet trades at 13x forward P/E. If you’re considering CENT for your portfolio, see our FREE research report to learn more.
Corcept (CORT)
Consensus Price Target: $88 (29.7% implied return)
Focusing on the powerful stress hormone that affects everything from metabolism to immune function, Corcept Therapeutics (NASDAQ: CORT) develops and markets medications that modulate cortisol to treat endocrine disorders, cancer, and neurological diseases.
Why Are We Wary of CORT?
- Earnings per share fell by 19.4% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 31 percentage points
- Eroding returns on capital suggest its historical profit centers are aging
Corcept’s stock price of $67.85 implies a valuation ratio of 57.6x forward P/E. Dive into our free research report to see why there are better opportunities than CORT.
One Stock to Watch:
Genpact (G)
Consensus Price Target: $42.45 (28.6% implied return)
Originally spun off from General Electric in 2005 to provide business process services, Genpact (NYSE: G) is a global professional services firm that helps businesses transform their operations through digital technology, AI, and data analytics solutions.
Why Does G Stand Out?
- Share repurchases have increased shareholder returns as its annual earnings per share growth of 11.8% exceeded its revenue gains over the last five years
- Strong free cash flow margin of 11.2% enables it to reinvest or return capital consistently, and its growing cash flow gives it even more resources to deploy
- Industry-leading 18.4% return on capital demonstrates management’s skill in finding high-return investments, and its returns are growing as it capitalizes on even better market opportunities
Genpact is trading at $33.00 per share, or 7.8x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
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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 Exlservice (+354% five-year return). Find your next big winner with StockStory today.
