1 of Wall Street's Favorite Stock with Exciting Potential and 2 to Keep Off Your Radar

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.

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 analysts may be overlooking some important risks.

Two Stocks to Sell:

Mattel (MAT)

Consensus Price Target: $23.49 (21.7% implied return)

Known for the creation of iconic toys such as Barbie and Hotwheels, Mattel (NASDAQ:MAT) is a global children's entertainment company specializing in the design and production of consumer products.

Why Does MAT Give Us Pause?

1. Sales trends were unexciting over the last two years as its 1.8% annual growth was below the typical consumer discretionary company
2. Projected sales are flat for the next 12 months, implying demand will slow from its two-year trend
3. Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability

At $19.30 per share, Mattel trades at 11.7x forward P/E. Check out our free in-depth research report to learn more about why MAT doesn’t pass our bar.

Bruker (BRKR)

Consensus Price Target: $55.97 (43.2% implied return)

With roots dating back to the pioneering days of nuclear magnetic resonance technology, Bruker (NASDAQ:BRKR) develops and manufactures high-performance scientific instruments that enable researchers and industrial analysts to explore materials at microscopic, molecular, and cellular levels.

Why Are We Hesitant About BRKR?

1. Expenses have increased as a percentage of revenue over the last two years as its adjusted operating margin fell by 5.1 percentage points
2. Free cash flow margin dropped by 9.4 percentage points over the last five years, implying the company became more capital intensive as competition picked up
3. Waning returns on capital imply its previous profit engines are losing steam

Bruker’s stock price of $39.10 implies a valuation ratio of 14.4x forward P/E. If you’re considering BRKR for your portfolio, see our FREE research report to learn more.

One Stock to Buy:

United Therapeutics (UTHR)

Consensus Price Target: $382.09 (34.1% implied return)

Founded by a mother seeking treatment for her daughter's pulmonary arterial hypertension, United Therapeutics (NASDAQ:UTHR) develops and commercializes medications for chronic lung diseases and other life-threatening conditions, with a focus on pulmonary hypertension treatments.

Why Is UTHR a Top Pick?

1. Market share has increased this cycle as its 22.9% annual revenue growth over the last two years was exceptional
2. Strong free cash flow margin of 36% enables it to reinvest or return capital consistently
3. Returns on capital are climbing as management makes more lucrative bets

United Therapeutics is trading at $285 per share, or 9.7x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

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