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.
At StockStory, we look beyond the headlines with our independent analysis to determine whether these bullish calls are justified. That said, here is one stock where Wall Street’s excitement appears well-founded and two where analysts may be overlooking some important risks.
Two Stocks to Sell:
Regal Rexnord (RRX)
Consensus Price Target: $248.20 (67.7% implied return)
Headquartered in Milwaukee, Regal Rexnord (NYSE: RRX) provides power transmission and industrial automation products.
Why Are We Cautious About RRX?
- Annual sales declines of 2.4% for the past two years show its products and services struggled to connect with the market during this cycle
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
Regal Rexnord’s stock price of $147.96 implies a valuation ratio of 12.7x forward P/E. If you’re considering RRX for your portfolio, see our FREE research report to learn more.
Moelis (MC)
Consensus Price Target: $72 (21% implied return)
Founded in 2007 by veteran banker Ken Moelis during the lead-up to the financial crisis, Moelis & Company (NYSE: MC) is an independent investment bank that provides strategic and financial advisory services to corporations, financial sponsors, governments, and sovereign wealth funds.
Why Do We Think Twice About MC?
- 4.9% annual revenue growth over the last five years was slower than its financials peers
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 9.1% annually while its revenue grew
- Tangible book value per share stagnated over the last five years, limiting its ability to leverage its balance sheet to make additional investments
At $59.53 per share, Moelis trades at 16.6x forward P/E. Check out our free in-depth research report to learn more about why MC doesn’t pass our bar.
One Stock to Watch:
Booking (BKNG)
Consensus Price Target: $238.78 (39.9% implied return)
Formerly known as The Priceline Group, Booking Holdings (NASDAQ: BKNG) is the world’s largest online travel agency.
Why Do We Like BKNG?
- Platform is difficult to replicate at scale and leads to a best-in-class gross margin of 87%
- Excellent EBITDA margin of 36.4% highlights the efficiency of its business model, and its profits increased over the last few years as it scaled
- BKNG is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
Booking is trading at $170.70 per share, or 11.9x forward EV/EBITDA. Is now a good time to buy? Find out in our full research report, it’s free.
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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.
