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.
Accurately determining a company’s long-term prospects isn’t easy, especially when sentiment is weak. That’s where StockStory comes in - to help you find attractive investment candidates backed by unbiased research. That said, here are two stocks poised to prove Wall Street wrong and one where the outlook is warranted.
One Stock to Sell:
Warner Bros. Discovery (WBD)
Consensus Price Target: $29.70 (5% implied return)
Formed from the merger of WarnerMedia and Discovery, Warner Bros. Discovery (NASDAQ:WBD) is a multinational media and entertainment company, offering television networks, streaming services, and film and television production.
Why Are We Out on WBD?
- The company has faced growth challenges as its 5.7% annual revenue increases over the last five years fell short of other consumer discretionary companies
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 8.4% for the last two years
- Improving returns on capital suggest management is identifying more profitable investments
At $28.29 per share, Warner Bros. Discovery trades at 154.7x forward P/E. Dive into our free research report to see why there are better opportunities than WBD.
Two Stocks to Buy:
Monster (MNST)
Consensus Price Target: $50.17 (5.6% implied return)
Founded in 2002 as a natural soda and juice company, Monster Beverage (NASDAQ:MNST) is a pioneer of the energy drink category, and its Monster Energy brand targets a young, active demographic.
Why Is MNST a Good Business?
- Highly efficient business model is illustrated by its impressive 28.6% operating margin, and its rise over the last year was fueled by some leverage on its fixed costs
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
- ROIC punches in at 35.4%, illustrating management’s expertise in identifying profitable investments, and its returns are climbing as it finds even more attractive growth opportunities
Monster is trading at $47.52 per share, or 38.6x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Ares (ARES)
Consensus Price Target: $146.89 (4.8% implied return)
With roots in the leveraged finance group of Apollo Management, Ares Management (NYSE:ARES) is an alternative investment firm that manages private equity, credit, real estate, and infrastructure assets for institutional and high-net-worth clients.
Why Will ARES Outperform?
- Annual revenue growth of 24.3% over the past two years was outstanding, reflecting market share gains this cycle
- Earnings per share grew by 19.5% annually over the last five years and easily exceeded the peer group average
Ares’s stock price of $140.22 implies a valuation ratio of 22.2x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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 (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.