3 of Wall Street’s Favorite Stocks We Find Risky

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. Keeping that in mind, here are three stocks where Wall Street may be overlooking some important risks and some alternatives with better fundamentals.

Victoria's Secret (VSCO)

Consensus Price Target: $64.44 (45.6% implied return)

Spun off from L Brands in 2020, Victoria’s Secret (NYSE:VSCO) is an intimate clothing and beauty retailer that sells its own brands of lingerie, undergarments, and personal fragrances.

Why Does VSCO Give Us Pause?

1. Muted 1.1% annual revenue growth over the last three years shows its demand lagged behind its consumer retail peers
2. Operating margin of 4.5% falls short of the industry average, and the smaller profit dollars make it harder to react to unexpected market developments
3. Incremental sales over the last three years were much less profitable as its earnings per share fell by 16.2% annually while its revenue grew

Victoria's Secret is trading at $44.25 per share, or 12.9x forward P/E. If you’re considering VSCO for your portfolio, see our FREE research report to learn more.

Whirlpool (WHR)

Consensus Price Target: $84.56 (56.7% implied return)

Credited with introducing the first automatic washing machine, Whirlpool (NYSE:WHR) is a manufacturer of a variety of home appliances.

Why Do We Pass on WHR?

1. Annual sales declines of 4.4% for the past five years show its products and services struggled to connect with the market during this cycle
2. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 7 percentage points
3. 6× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings

At $53.95 per share, Whirlpool trades at 10.1x forward P/E. Check out our free in-depth research report to learn more about why WHR doesn’t pass our bar.

Surgery Partners (SGRY)

Consensus Price Target: $18.80 (58.7% implied return)

With more than 180 locations across 33 states serving as alternatives to traditional hospital settings, Surgery Partners (NASDAQ:SGRY) operates a national network of outpatient surgical facilities including ambulatory surgery centers and short-stay surgical hospitals.

Why Does SGRY Worry Us?

1. Weak unit sales over the past two years show it’s struggled to increase its sales volumes and had to rely on price increases
2. Estimated sales growth of 2.9% for the next 12 months implies demand will slow from its two-year trend
3. High net-debt-to-EBITDA ratio of 7× increases the risk of forced asset sales or dilutive financing if operational performance weakens

Surgery Partners’s stock price of $11.85 implies a valuation ratio of 60.9x forward P/E. Read our free research report to see why you should think twice about including SGRY in your portfolio.

High-Quality Stocks for All Market Conditions

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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.