2 of Wall Street’s Favorite Stocks with Competitive Advantages and 1 We Find Risky

Barchart·05/05/2026 23:50:20

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 are two stocks where Wall Street’s excitement appears well-founded and one where its enthusiasm might be excessive.

One Stock to Sell:

Helix Energy Solutions (HLX)

Consensus Price Target: $12.50 (21.9% implied return)

Playing a pivotal role in the 2010 Macondo oil spill response with its Q4000 vessel, Helix Energy Solutions (NYSE:HLX) provides specialized services to extend the life of offshore oil and gas wells and decommission aging infrastructure.

Why Is HLX Not Exciting?

1. Smaller revenue base of $1.30 billion means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
2. High extraction costs and unfavorable asset economics are reflected in its low gross margin of 11.4%

Helix Energy Solutions is trading at $10.26 per share, or 1.1x forward price-to-sales. Check out our free in-depth research report to learn more about why HLX doesn’t pass our bar.

Two Stocks to Watch:

Woodward (WWD)

Consensus Price Target: $437.30 (20.1% implied return)

Initially designing controls for water wheels in the early 1900s, Woodward (NASDAQ:WWD) designs, services, and manufactures energy control products and optimization solutions.

Why Should You Buy WWD?

1. Annual revenue growth of 13% over the last five years was superb and indicates its market share increased during this cycle
2. Operating profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
3. Share buybacks catapulted its annual earnings per share growth to 19.9%, which outperformed its revenue gains over the last two years

At $364.18 per share, Woodward trades at 35.8x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.

Donnelley Financial Solutions (DFIN)

Consensus Price Target: $63 (47.5% implied return)

Born from the need to navigate increasingly complex financial regulations in the digital age, Donnelley Financial Solutions (NYSE:DFIN) provides software and technology-enabled services that help companies comply with SEC regulations and manage financial transactions and reporting requirements.

Why Is DFIN Interesting?

1. Industry-leading 24.4% return on equity demonstrates management’s skill in finding high-return investments

Donnelley Financial Solutions’s stock price of $42.71 implies a valuation ratio of 1.7x trailing 12-month price-to-sales. Is now a good time to buy? See for yourself in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.

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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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.

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