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. Keeping that in mind, here are two stocks where Wall Street’s excitement appears well-founded and one where analysts may be overlooking some important risks.
One Stock to Sell:
Ally Financial (ALLY)
Consensus Price Target: $50.56 (33% implied return)
Born from the former GMAC (General Motors Acceptance Corporation) and rebranded in 2010, Ally Financial (NYSE: ALLY) operates a digital-first bank offering auto financing, insurance, mortgage lending, and investment services to consumers and commercial clients.
Why Do We Avoid ALLY?
- Muted 2.8% annual revenue growth over the last five years shows its demand lagged behind its financials peers
- Earnings per share fell by 8.9% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
- 10× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly
Ally Financial is trading at $38.02 per share, or 6.6x forward P/E. If you’re considering ALLY for your portfolio, see our FREE research report to learn more.
Two Stocks to Watch:
CAVA (CAVA)
Consensus Price Target: $82 (55.7% implied return)
Starting from a single Washington, D.C. location, CAVA (NYSE: CAVA) operates a fast-casual restaurant chain offering customizable Mediterranean-inspired dishes.
Why Does CAVA Catch Our Eye?
- Fast expansion of new restaurants to reach markets with few or no locations is justified by its same-store sales growth
- Same-store sales growth over the past two years shows it’s successfully drawing diners into its restaurants
- Revenue outlook for the upcoming 12 months is outstanding and shows it’s on track to gain market share
CAVA’s stock price of $52.68 implies a valuation ratio of 81.4x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Aramark (ARMK)
Consensus Price Target: $68.50 (23.5% implied return)
From serving hot dogs at major league stadiums to managing college dining halls that feed thousands daily, Aramark (NYSE: ARMK) provides food services and facilities management to schools, healthcare facilities, businesses, sports venues, and correctional institutions across 16 countries.
Why Is ARMK a Top Pick?
- Annual revenue growth of 12% over the last five years was superb and indicates its market share increased during this cycle
- Enormous revenue base of $19.85 billion provides significant distribution advantages
- Performance over the past five years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 34.5% outpaced its revenue gains
At $55.46 per share, Aramark trades at 20.9x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
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.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.
