Wall Street has set ambitious price targets for the stocks in this article. While this suggests attractive upside potential, it’s important to remain skeptical because analysts face institutional pressures that can sometimes lead to overly optimistic forecasts.
At StockStory, we look beyond the headlines with our independent analysis to determine whether these bullish calls are justified. That said, here are two stocks where Wall Street’s positive outlook is supported by strong fundamentals and one where its enthusiasm might be excessive.
One Stock to Sell:
LKQ (LKQ)
Consensus Price Target: $40.81 (55.8% implied return)
A global distributor of vehicle parts and accessories, LKQ (NASDAQ: LKQ) offers its customers a comprehensive selection of high-quality, affordably priced automobile products.
Why Are We Out on LKQ?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Free cash flow margin is anticipated to expand by 1.2 percentage points over the next year, providing additional flexibility for investments and share buybacks/dividends
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
LKQ’s stock price of $26.20 implies a valuation ratio of 8.6x forward P/E. To fully understand why you should be careful with LKQ, check out our full research report (it’s free).
Two Stocks to Watch:
DexCom (DXCM)
Consensus Price Target: $84.67 (22.5% implied return)
Founded in 1999 and receiving its first FDA approval in 2006, DexCom (NASDAQ: DXCM) develops and sells continuous glucose monitoring systems that allow people with diabetes to track their blood sugar levels without repeated finger pricks.
Why Is DXCM a Good Business?
- Core business is healthy and doesn’t need acquisitions to boost sales as its organic revenue growth averaged 12.5% over the past two years
- Free cash flow margin grew by 26 percentage points over the last five years, giving the company more chips to play with
- Returns on capital are growing as management capitalizes on its market opportunities
DexCom is trading at $69.10 per share, or 25.2x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Pfizer (PFE)
Consensus Price Target: $29.19 (22.2% implied return)
With roots dating back to 1849 when two German immigrants opened a fine chemicals business in Brooklyn, Pfizer (NYSE: PFE) is a global biopharmaceutical company that discovers, develops, manufactures, and sells medicines and vaccines for a wide range of diseases and conditions.
Why Are We Fans of PFE?
- Massive revenue base of $63.32 billion in a highly regulated sector makes the company difficult to replace, giving it meaningful negotiating power
- Adjusted operating profits increased over the last two years as the company gained some leverage on its fixed costs and became more efficient
- Stellar returns on capital showcase management’s ability to surface highly profitable business ventures
At $23.90 per share, Pfizer trades at 8.5x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
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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 Exlservice (+354% five-year return). Find your next big winner with StockStory today.
