1 of Wall Street's Favorite Stock to Keep an Eye On and 2 We Brush Off

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 positive outlook is supported by strong fundamentals and two where consensus estimates seem disconnected from reality.

Two Stocks to Sell:

Stratasys (SSYS)

Consensus Price Target: $15.33 (41.2% implied return)

Born from the Founder’s idea of making a toy frog with a glue gun, Stratasys (NASDAQ:SSYS) offers 3D printers and related materials, software, and services to many industries.

Why Are We Out on SSYS?

1. Sales tumbled by 1.7% annually over the last five years, showing market trends are working against its favor during this cycle
2. Issuance of new shares over the last five years caused its earnings per share to fall by 13.6% annually, even worse than its revenue declines
3. Cash-burning history makes us doubt the long-term viability of its business model

At $10.86 per share, Stratasys trades at 34.5x forward P/E. Check out our free in-depth research report to learn more about why SSYS doesn’t pass our bar.

Eastern Bank (EBC)

Consensus Price Target: $19.50 (24.2% implied return)

Founded in 1818 as one of America's oldest mutual banks before converting to a public company in 2020, Eastern Bankshares (NASDAQ:EBC) operates as a bank holding company providing commercial and retail banking services primarily in Massachusetts, New Hampshire, and Rhode Island.

Why Do We Think Twice About EBC?

1. Annual revenue growth of 1.6% over the last five years was below our standards for the bank sector
2. Annual tangible book value per share declines of 6.8% for the past four years show its capital management struggled during this cycle
3. Forecasted tangible book value per share decline of 5.5% for the upcoming 12 months implies profitability will deteriorate significantly

Eastern Bank’s stock price of $15.70 implies a valuation ratio of 0.9x forward P/B. Dive into our free research report to see why there are better opportunities than EBC.

One Stock to Watch:

Globus Medical (GMED)

Consensus Price Target: $83 (56.6% implied return)

With operations spanning 64 countries and a portfolio of over 10 new products launched in 2023 alone, Globus Medical (NYSE:GMED) develops and sells implantable devices, surgical instruments, and technology solutions for spine, orthopedic, and neurosurgical procedures.

Why Are We Fans of GMED?

1. Business is well-positioned no matter the global macroeconomic backdrop as its constant currency revenue growth averaged 61.4% over the past two years
2. Expected revenue growth of 18.1% for the next year suggests its market share will rise
3. Earnings growth has trumped its peers over the last five years as its EPS has compounded at 13.8% annually

Globus Medical is trading at $53 per share, or 15.1x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.

High-Quality Stocks for All Market Conditions

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