1 of Wall Street's Favorite Stock to Own for Decades and 2 We Avoid

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. That said, here is one stock where Wall Street’s excitement appears well-founded and two where its enthusiasm might be excessive.

Two Stocks to Sell:

Allegro MicroSystems (ALGM)

Consensus Price Target: $38.58 (40.3% implied return)

The result of a spinoff from Sanken in Japan, Allegro MicroSystems (NASDAQ:ALGM) is a designer of power management chips and distance sensors used in electric vehicles and data centers.

Why Are We Hesitant About ALGM?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 14.2% annually over the last two years
2. Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 15.6% annually
3. Weak free cash flow margin of 7.8% has deteriorated further over the last five years as its investments increased

Allegro MicroSystems is trading at $27.50 per share, or 36.5x forward P/E. Read our free research report to see why you should think twice about including ALGM in your portfolio.

MetLife (MET)

Consensus Price Target: $92.40 (19.7% implied return)

Founded in 1863 by a group of New York businessmen during the Civil War era, MetLife (NYSE:MET) is a global financial services company that provides insurance, annuities, employee benefits, and asset management services to individuals and businesses worldwide.

Why Should You Dump MET?

1. Net premiums earned only expanded by 2.6% annually over the last five years, trailing its insurance peers as its scale limited incremental business
2. Earnings per share lagged its peers over the last two years as they only grew by 10% annually
3. Annual book value per share declines of 11.6% for the past five years show its capital management struggled during this cycle

MetLife’s stock price of $77.18 implies a valuation ratio of 2x forward P/B. Dive into our free research report to see why there are better opportunities than MET.

One Stock to Buy:

Shift4 (FOUR)

Consensus Price Target: $96.67 (35.8% implied return)

Starting as a payment gateway provider in 1999 and now processing over $200 billion in annual payment volume, Shift4 Payments (NYSE:FOUR) provides integrated payment processing solutions and software that help businesses accept and manage transactions across in-store, online, and mobile channels.

Why Is FOUR a Top Pick?

1. Annual revenue growth of 27.2% over the last two years was superb and indicates its market share increased during this cycle
2. Incremental sales over the last two years have been highly profitable as its earnings per share increased by 40.2% annually, topping its revenue gains
3. Acceptable return on equity suggests management generated shareholder value by investing in profitable projects

At $71.19 per share, Shift4 trades at 11.7x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.

High-Quality Stocks for All Market Conditions

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

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