2 of Wall Street's Favorite Stocks with Competitive Advantages and 1 We Turn Down

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 two stocks where Wall Street’s positive outlook is supported by strong fundamentals and one where consensus estimates seem disconnected from reality.

One Stock to Sell:

Lovesac (LOVE)

Consensus Price Target: $24.67 (79.4% implied return)

Known for its oversized, premium beanbags, Lovesac (NASDAQ:LOVE) is a specialty furniture brand selling modular furniture.

Why Should You Sell LOVE?

1. 19.5% annual revenue growth over the last five years was slower than its consumer discretionary peers
2. Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
3. Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results

Lovesac is trading at $13.75 per share, or 10.2x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including LOVE in your portfolio.

Two Stocks to Watch:

e.l.f. Beauty (ELF)

Consensus Price Target: $112.79 (38.6% implied return)

Short for "eyes, lips, face", e.l.f. Beauty (NYSE:ELF) is a developer of high-quality beauty products at accessible price points.

Why Are We Positive On ELF?

1. Impressive 45.2% annual revenue growth over the last three years indicates it’s winning market share
2. Earnings per share have massively outperformed its peers over the last three years, increasing by 38.2% annually
3. Free cash flow margin expanded by 12.2 percentage points over the last year, providing additional flexibility for investments and share buybacks/dividends

At $81.38 per share, e.l.f. Beauty trades at 22.6x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.

Abbott Laboratories (ABT)

Consensus Price Target: $133.39 (19% implied return)

With roots dating back to 1888 when founder Dr. Wallace Abbott began producing precise, dosage-form medications, Abbott Laboratories (NYSE:ABT) develops and sells a diverse range of healthcare products including medical devices, diagnostics, nutrition products, and branded generic pharmaceuticals.

Why Are We Fans of ABT?

1. Scale advantages are evident in its $44.33 billion revenue base, which provides operating leverage when demand is strong
2. ABT is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
3. Industry-leading 13.3% return on capital demonstrates management’s skill in finding high-return investments

Abbott Laboratories’s stock price of $112.09 implies a valuation ratio of 19.6x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.

The names generating the next wave of massive growth are right here in our Top 6 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.