2 of Wall Street's Favorite Stocks with Exciting Potential and 1 Facing Headwinds

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. Keeping that in mind, here are two stocks likely to meet or exceed Wall Street’s lofty expectations and one where its enthusiasm might be excessive.

One Stock to Sell:

Power Integrations (POWI)

Consensus Price Target: $60.80 (34% implied return)

A leading supplier of parts for electronics such as home appliances, Power Integrations (NASDAQ:POWI) is a semiconductor designer and developer specializing in products used for high-voltage power conversion.

Why Is POWI Risky?

1. Flat sales over the last five years suggest it must find different ways to grow during this cycle
2. Expenses have increased as a percentage of revenue over the last five years as its operating margin fell by 15.7 percentage points
3. Sales over the last five years were less profitable as its earnings per share fell by 2.1% annually while its revenue was flat

Power Integrations is trading at $45.37 per share, or 32.6x forward P/E. If you’re considering POWI for your portfolio, see our FREE research report to learn more.

Two Stocks to Watch:

Universal Display (OLED)

Consensus Price Target: $181.89 (22.1% implied return)

Serving major consumer electronics manufacturers, Universal Display (NASDAQ:OLED) is a provider of organic light emitting diode (OLED) technologies used in display and lighting applications.

Why Do We Like OLED?

1. Annual revenue growth of 12.4% over the last five years beat the sector average and underscores the unique value of its offerings
2. Offerings are mission-critical for businesses and lead to a best-in-class gross margin of 75.4%
3. Highly efficient business model is illustrated by its impressive 38.1% operating margin

At $149 per share, Universal Display trades at 29x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free for active Edge members .

Fiserv (FI)

Consensus Price Target: $178.38 (46.3% implied return)

Powering over 1 billion accounts and processing more than 12,000 financial transactions per second globally, Fiserv (NYSE:FI) provides payment processing and financial technology solutions that enable merchants, banks, and credit unions to accept payments and manage financial transactions.

Why Are We Fans of FI?

1. 8.5% annual revenue growth over the last two years was better than the sector average, highlighting the value of its products and services
2. Performance over the past five years was boosted by share buybacks, which enabled its earnings per share to grow faster than its revenue

Fiserv’s stock price of $121.90 implies a valuation ratio of 11.2x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.

High-Quality Stocks for All Market Conditions

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