
1 of Wall Street’s Favorite Stock to Target This Week and 2 to Avoid
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 likely to meet or exceed Wall Street’s lofty expectations and two where consensus estimates seem disconnected from reality.
Two Stocks to Sell:
Offerpad (OPAD)
Consensus Price Target: $3.79 (103% implied return)
Known for giving homeowners cash offers within 24 hours, Offerpad (NYSE:OPAD) operates a tech-enabled platform specializing in direct home buying and selling solutions.
Why Do We Think OPAD Will Underperform?
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Demand for its offerings was relatively low as its number of homes purchased has underwhelmed
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Capital intensity will likely ramp up in the next year as its free cash flow margin is expected to contract by 5.3 percentage points
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Unprofitable operations could lead to additional rounds of dilutive equity financing if the credit window closes
Offerpad’s stock price of $1.10 implies a valuation ratio of 9.9x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than OPAD .
Sensata Technologies (ST)
Consensus Price Target: $39.10 (49.7% implied return)
Originally a temperature sensor control maker and a subsidiary of Texas Instruments for 60 years, Sensata Technology Holdings (NYSE: ST) is a leading supplier of analog sensors used in industrial and transportation applications, best known for its dominant position in the tire pressure monitoring systems in cars.
Why Do We Steer Clear of ST?
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Annual revenue growth of 2.7% over the last five years was below our standards for the semiconductor sector
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Sales are expected to decline once again over the next 12 months as it continues working through a challenging demand environment
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Substandard operating profitability and its deterioration over the last five years limit its responsiveness to unforeseen market trends
Sensata Technologies is trading at $21.29 per share, or 6.5x forward price-to-earnings. If you’re considering ST for your portfolio, see our FREE research report to learn more .
One Stock to Watch:
CECO Environmental (CECO)
Consensus Price Target: $36.20 (73.5% implied return)
With roots dating back to 1869 and a focus on creating cleaner industrial operations, CECO Environmental (NASDAQ:CECO) provides technology and expertise that helps industrial companies reduce emissions, treat water, and improve energy efficiency across various sectors.