
Wall Street’s bearish price targets for the stocks in this article signal serious concerns. Such forecasts are uncommon in an industry where maintaining cordial corporate relationships often trumps delivering the hard truth.
Whatever the consensus opinion may be, our team at StockStory cuts through the noise by conducting independent analysis to determine a company’s long-term prospects. Keeping that in mind, here is one stock poised to prove Wall Street wrong and two where the skepticism is well-placed.
Two Stocks to Sell:
ADT (ADT)
Consensus Price Target: $8.23 (10.2% implied return)
Founded in 1874 and headquartered in Boca Raton, Florida, ADT (NYSE:ADT) is a provider of security, automation, and smart home solutions, offering comprehensive services for home and business protection.
Why Is ADT Risky?
- Sales were flat over the last five years, indicating it’s failed to expand its business
- Capital intensity will likely increase as its free cash flow margin is anticipated to drop by 4.6 percentage points over the next year
- ROIC of 8% reflects management’s challenges in identifying attractive investment opportunities
At $7.47 per share, ADT trades at 7.8x forward P/E. Check out our free in-depth research report to learn more about why ADT doesn’t pass our bar.
Sixth Street Specialty Lending (TSLX)
Consensus Price Target: $19.77 (5% implied return)
Originally launched as TPG Specialty Lending before rebranding in 2020, Sixth Street Specialty Lending (NYSE:TSLX) is a business development company that provides customized financing solutions to middle-market companies across various industries.
Why Are We Out on TSLX?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 7.1% annually over the last two years
- Earnings per share have dipped by 7.9% annually over the past two years, which is concerning because stock prices follow EPS over the long term
Sixth Street Specialty Lending’s stock price of $18.83 implies a valuation ratio of 10.6x forward P/E. Read our free research report to see why you should think twice about including TSLX in your portfolio.
One Stock to Watch:
Amgen (AMGN)
Consensus Price Target: $388.48 (-11.3% implied return)
Founded in 1980 during the early days of the biotechnology revolution, Amgen (NASDAQ:AMGN) is a biotechnology company that discovers, develops, and manufactures innovative medicines to treat serious illnesses like cancer, osteoporosis, and autoimmune diseases.
Why Could AMGN Be a Winner?
- $38.1 billion in revenue gives it scale, which leads to bargaining power with customers because there are few trusted alternatives
- AMGN is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
- Stellar returns on capital showcase management’s ability to surface highly profitable business ventures
Amgen is trading at $438.15 per share, or 18.9x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.