The stocks in this article have caught Wall Street’s attention in a big way, with price targets implying returns above 20%. But investors should take these forecasts with a grain of salt because analysts typically say nice things about companies so their firms can win business in other product lines like M&A advisory.
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 where Wall Street’s excitement appears well-founded and two where analysts may be overlooking some important risks.
Two Industrials Stocks to Sell:
AeroVironment (AVAV)
Consensus Price Target: $232.88 (64.6% implied return)
Focused on the future of autonomous military combat, AeroVironment (NASDAQ: AVAV) specializes in advanced unmanned aircraft systems and electric vehicle charging solutions.
Why Does AVAV Give Us Pause?
- Efficiency has decreased over the last five years as its operating margin fell by 13.5 percentage points
- Cash-burning history makes us doubt the long-term viability of its business model
- Negative returns on capital show management lost money while trying to expand the business
At $141.51 per share, AeroVironment trades at 44.2x forward P/E. Check out our free in-depth research report to learn more about why AVAV doesn’t pass our bar.
Methode Electronics (MEI)
Consensus Price Target: $19.33 (25.2% implied return)
Founded in 1946, Methode Electronics (NYSE: MEI) is a global supplier of custom-engineered solutions for Original Equipment Manufacturers (OEMs).
Why Do We Steer Clear of MEI?
- Sales tumbled by 1.3% annually over the last five years, showing market trends are working against it during this cycle
- Sales were less profitable over the last five years as its earnings per share fell by 18.6% annually, worse than its revenue declines
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Methode Electronics is trading at $15.45 per share, or 11.8x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than MEI.
One Industrials Stock to Buy:
ESCO (ESE)
Consensus Price Target: $385 (17.5% implied return)
A developer of the communication systems used in the Batmobile of “The Dark Knight,” ESCO (NYSE: ESE) is a provider of engineered components for the aerospace, defense, and utility sectors.
Why Will ESE Beat the Market?
- Annual revenue growth of 12.3% over the last two years was superb and indicates its market share increased during this cycle
- Additional sales over the last two years increased its profitability as the 38.4% annual growth in its earnings per share outpaced its revenue
- Free cash flow margin jumped by 10.9 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
ESCO’s stock price of $327.73 implies a valuation ratio of 38.4x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
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.
