Wall Street is overwhelmingly bullish on the stocks in this article, with price targets suggesting significant upside potential. However, it’s worth remembering that analysts rarely issue sell ratings, partly because their firms often seek other business from the same companies they cover.
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 is one stock likely to meet or exceed Wall Street’s lofty expectations and two where its enthusiasm might be excessive.
Two Stocks to Sell:
Shake Shack (SHAK)
Consensus Price Target: $79.70 (26.6% implied return)
Started as a hot dog cart in New York City's Madison Square Park, Shake Shack (NYSE: SHAK) is a fast-food restaurant known for its burgers and milkshakes.
Why Does SHAK Fall Short?
- Poor expense management has led to an operating margin of 2.3% that is below the industry average
- Poor free cash flow margin of 2% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
At $62.93 per share, Shake Shack trades at 51.8x forward P/E. If you’re considering SHAK for your portfolio, see our FREE research report to learn more.
Encompass Health (EHC)
Consensus Price Target: $140.50 (28.3% implied return)
With a network of 161 specialized facilities across 37 states and Puerto Rico, Encompass Health (NYSE: EHC) operates inpatient rehabilitation hospitals that help patients recover from strokes, hip fractures, and other debilitating conditions.
Why Do We Think Twice About EHC?
- Annual revenue growth of 6.5% over the last five years was below our standards for the healthcare sector
- Weak comparable store sales trends over the past two years suggest there may be few opportunities in its core markets to open new facilities
- Adjusted operating margin failed to increase over the last five years, indicating the company couldn’t optimize its expenses
Encompass Health’s stock price of $109.52 implies a valuation ratio of 18.6x forward P/E. Check out our free in-depth research report to learn more about why EHC doesn’t pass our bar.
One Stock to Watch:
Helmerich & Payne (HP)
Consensus Price Target: $40.80 (20.9% implied return)
Operating the largest fleet of super-spec rigs in North America with technology that can drill horizontal wells over two miles long, Helmerich & Payne (NYSE: HP) provides drilling rigs and crews to oil and gas companies that need wells drilled to extract hydrocarbons from underground.
Why Does HP Catch Our Eye?
- Annual revenue growth of 32.2% over the past five years was outstanding, reflecting market share gains this cycle
- $4.00 billion in revenue gives it scale, which leads to bargaining power with suppliers and retailers
- EBITDA profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
Helmerich & Payne is trading at $33.74 per share, or 31.6x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth 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-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
