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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.

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 is one stock likely to meet or exceed Wall Street’s lofty expectations and two where its enthusiasm might be excessive.

Two Stocks to Sell:

The Honest Company (HNST)

Consensus Price Target: $7.33 (54.5% implied return)

Co-founded by actress Jessica Alba, The Honest Company (NASDAQ:HNST) sells diapers and wipes, skin care products, and household cleaning products.

Why Are We Wary of HNST?

1. Annual revenue growth of 5.9% over the last three years was below our standards for the consumer staples sector

2. Revenue base of $378.3 million puts it at a disadvantage compared to larger competitors exhibiting economies of scale

3. Suboptimal cost structure is highlighted by its history of operating losses

The Honest Company is trading at $4.80 per share, or 20.3x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than HNST.

Warner Music Group (WMG)

Consensus Price Target: $35.56 (18.2% implied return)

Launching the careers of legendary artists like Frank Sinatra, Warner Music Group (NASDAQ:WMG) is a music company managing a diverse portfolio of artists, recordings, and music publishing services worldwide.

Why Does WMG Worry Us?

1. Lackluster 4.6% annual revenue growth over the last two years indicates the company is losing ground to competitors

2. Anticipated sales growth of 3.6% for the next year implies demand will be shaky

3. ROIC of 10.1% reflects management’s challenges in identifying attractive investment opportunities

At $29.99 per share, Warner Music Group trades at 21.8x forward price-to-earnings. Read our free research report to see why you should think twice about including WMG in your portfolio, it’s free.

One Stock to Buy:

Tetra Tech (TTEK)

Consensus Price Target: $49 (25% implied return)

With a 50-year legacy of "Leading with Science" and operations on all seven continents, Tetra Tech (NASDAQ:TTEK) provides high-end consulting and engineering services focused on water management, environmental solutions, and sustainable infrastructure for government and commercial clients worldwide.

Why Is TTEK a Top Pick?

1. Annual revenue growth of 24.8% over the past two years was outstanding, reflecting market share gains this cycle

2. Sales pipeline is in good shape as its backlog averaged 19.1% growth over the past two years

3. Share repurchases over the last five years enabled its annual earnings per share growth of 14.9% to outpace its revenue gains