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. Keeping that in mind, here are two stocks where Wall Street’s positive outlook is supported by strong fundamentals and one where analysts may be overlooking some important risks.
One Stock to Sell:
Churchill Downs (CHDN)
Consensus Price Target: $137 (31.2% implied return)
Famous for hosting the Kentucky Derby, Churchill Downs (NASDAQ:CHDN) operates a horse racing, online wagering, and gaming entertainment business in the United States.
Why Are We Hesitant About CHDN?
- 10.1% annual revenue growth over the last two years was slower than its consumer discretionary peers
- Estimated sales growth of 3.9% for the next 12 months implies demand will slow from its two-year trend
- Low returns on capital reflect management’s struggle to allocate funds effectively
At $104.39 per share, Churchill Downs trades at 16.7x forward P/E. To fully understand why you should be careful with CHDN, check out our full research report (it’s free for active Edge members).
Two Stocks to Buy:
Uber (UBER)
Consensus Price Target: $110.55 (32.5% implied return)
Notoriously funded with $7.7 billion from the Softbank Vision Fund, Uber (NYSE:UBER) operates a platform of on-demand services such as ride-hailing, food delivery, and freight.
Why Are We Backing UBER?
- Monthly Active Platform Consumers are rising, meaning the company can increase revenue without incurring additional customer acquisition costs if it can cross-sell additional products and features
- Additional sales over the last three years increased its profitability as the 212% annual growth in its earnings per share outpaced its revenue
- Free cash flow margin increased by 15.7 percentage points over the last few years, giving the company more capital to invest or return to shareholders
Uber is trading at $83.43 per share, or 17.1x forward EV/EBITDA. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
Carlyle (CG)
Consensus Price Target: $65.31 (29.5% implied return)
Founded in 1987 with just $5 million in capital and named after the iconic New York hotel where the founders first met, The Carlyle Group (NASDAQ:CG) is a global investment firm that raises, manages, and deploys capital across private equity, credit, and investment solutions.
Why Will CG Beat the Market?
- Products and services resonate with customers, evidenced by its respectable 10.9% annualized sales growth over the last five years
- 23.6% annual growth in fee-related earnings over the last two years shows the firm optimized its expenses
- Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 23.9% outpaced its revenue gains
Carlyle’s stock price of $50.43 implies a valuation ratio of 11.1x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free for active Edge members .
High-Quality Stocks for All Market Conditions
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out 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-small-cap company Comfort Systems (+782% 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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