3 of Wall Street's Favorite Stocks Walking a Fine Line

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 are three stocks where Wall Street may be overlooking some important risks and some alternatives with better fundamentals.

Leggett & Platt (LEG)

Consensus Price Target: $11 (23.9% implied return)

Founded in 1883, Leggett & Platt (NYSE:LEG) is a diversified manufacturer of products and components for various industries.

Why Are We Out on LEG?

1. Sales stagnated over the last five years and signal the need for new growth strategies
2. Earnings per share fell by 12.7% annually over the last five years while its revenue was flat, showing each sale was less profitable
3. Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results

Leggett & Platt is trading at $8.88 per share, or 8.3x forward P/E. To fully understand why you should be careful with LEG, check out our full research report (it’s free for active Edge members).

NN (NNBR)

Consensus Price Target: $5.75 (304% implied return)

Formerly known as Nuturn, NN (NASDAQ:NNBR) provides metal components, bearings, and plastic and rubber components to the automotive, aerospace, medical, and industrial sectors.

Why Do We Avoid NNBR?

1. Sales tumbled by 7.4% annually over the last two years, showing market trends are working against its favor during this cycle
2. Performance over the past five years was negatively impacted by new share issuances as its earnings per share fell by 18.8% annually while its revenue was flat
3. Cash burn makes us question whether it can achieve sustainable long-term growth

NN’s stock price of $1.43 implies a valuation ratio of 33.5x forward P/E. If you’re considering NNBR for your portfolio, see our FREE research report to learn more.

Jazz Pharmaceuticals (JAZZ)

Consensus Price Target: $188.88 (11.6% implied return)

Originally founded in 2003 and now headquartered in Ireland following a 2012 tax inversion merger, Jazz Pharmaceuticals (NASDAQGS:JAZZ) develops and markets medicines for sleep disorders, epilepsy, and cancer, with a focus on treatments for patients with limited therapeutic options.

Why Does JAZZ Fall Short?

1. Annual revenue growth of 4.7% over the last two years was below our standards for the healthcare sector
2. Issuance of new shares over the last five years caused its earnings per share to fall by 8.7% annually while its revenue grew
3. 5× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly

At $169.29 per share, Jazz Pharmaceuticals trades at 6.2x forward P/E. Dive into our free research report to see why there are better opportunities than JAZZ.

Stocks We Like More

The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today

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