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.
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 likely to meet or exceed Wall Street’s lofty expectations and two where consensus estimates seem disconnected from reality.
Two Stocks to Sell:
Northrop Grumman (NOC)
Consensus Price Target: $696.95 (27.1% implied return)
Responsible for the development of the first stealth bomber, Northrop Grumman (NYSE: NOC) specializes in providing aerospace, defense, and security solutions for various industry applications.
Why Do We Pass on NOC?
- Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 2.6% over the last five years was below our standards for the industrials sector
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 5.4%
- Earnings growth over the last five years fell short of the peer group average as its EPS only increased by 3.1% annually
At $548.43 per share, Northrop Grumman trades at 19.5x forward P/E. Check out our free in-depth research report to learn more about why NOC doesn’t pass our bar.
PROG (PRG)
Consensus Price Target: $45.79 (18.9% implied return)
Evolving from its origins as Aaron's, Inc. before rebranding in 2020, PROG Holdings (NYSE: PRG) provides alternative payment solutions including lease-to-own options and second-look credit products for consumers who may not qualify for traditional financing.
Why Do We Avoid PRG?
- Flat sales over the last five years suggest it must find different ways to grow during this cycle
- Earnings per share fell by 5.4% annually over the last five years while its revenue was flat, showing each sale was less profitable
- Products and services are facing significant credit quality challenges during this cycle as tangible book value per share has declined by 62.4% annually over the last five years
PROG is trading at $38.50 per share, or 8.3x forward P/E. Dive into our free research report to see why there are better opportunities than PRG.
One Stock to Watch:
Flywire (FLYW)
Consensus Price Target: $19 (28.6% implied return)
Initially created to solve the challenges of international student tuition payments, Flywire (NASDAQ: FLYW) provides specialized payment processing and software solutions that help educational institutions, healthcare systems, travel companies, and businesses manage complex payments.
Why Are We Fans of FLYW?
- Billings have averaged 36.5% growth over the last year, showing it’s securing new contracts that could potentially increase in value over time
- Operating margin of 5% highlights its superior profitability versus many of its software peers, and its profits increased over the last year as it scaled
- Has the option to reinvest or return capital to investors as its 23% free cash flow margin is well above its peers
Flywire’s stock price of $14.77 implies a valuation ratio of 2.5x forward price-to-sales. Is now a good time to buy? Find out in our full 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 Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
