1 of Wall Street’s Favorite Stocks for Long-Term Investors and 2 We Ignore
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 is one stock where Wall Street’s positive outlook is supported by strong fundamentals and two where analysts may be overlooking some important risks.
Two Stocks to Sell:
Royal Caribbean (RCL)
Consensus Price Target: $346.92 (30.3% implied return)
Established in 1968, Royal Caribbean Cruises (NYSE:RCL) is a global cruise vacation company renowned for its innovative and exciting cruise experiences.
Why Do We Avoid RCL?
- Sluggish trends in its passenger cruise days suggest customers aren’t adopting its solutions as quickly as the company hoped
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
- ROIC of 7.6% reflects management’s challenges in identifying attractive investment opportunities
Royal Caribbean’s stock price of $266.35 implies a valuation ratio of 14.3x forward P/E. If you’re considering RCL for your portfolio, see our FREE research report to learn more.
West Pharmaceutical Services (WST)
Consensus Price Target: $404.73 (19.5% implied return)
Founded in 1923 and serving as a critical link in the pharmaceutical supply chain, West Pharmaceutical Services (NYSE:WST) manufactures specialized packaging, containment systems, and delivery devices for injectable drugs and healthcare products.
Why Does WST Fall Short?
- Annual revenue growth of 5.7% over the last five years was below our standards for the healthcare sector
- Day-to-day expenses have swelled relative to revenue over the last five years as its adjusted operating margin fell by 5.3 percentage points
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
At $338.58 per share, West Pharmaceutical Services trades at 36.8x forward P/E. Dive into our free research report to see why there are better opportunities than WST.
One Stock to Buy:
ITT (ITT)
Consensus Price Target: $256.15 (28.5% implied return)
Playing a crucial role in the development of the first transatlantic television transmission in 1956, ITT (NYSE:ITT) provides motion and fluid handling equipment for various industries.
Why Should You Buy ITT?
- Market share has increased this cycle as its 16.9% annual revenue growth over the last two years was exceptional
- Exciting sales outlook for the upcoming 12 months calls for 23% growth, an acceleration from its two-year trend
- Earnings per share grew by 17% annually over the last two years, massively outpacing its peers
ITT is trading at $199.42 per share, or 22.6x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.