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.

At StockStory, we look beyond the headlines with our independent analysis to determine whether these bullish calls are justified. Keeping that in mind, here are three stocks where Wall Street’s enthusiasm may be misplaced and some other investments worth exploring instead.

Driven Brands (DRVN)

Consensus Price Target: $21.92 (27.5% implied return)

With approximately 5,000 locations across 49 U.S. states and 13 other countries, Driven Brands (NASDAQ:DRVN) operates a network of automotive service centers offering maintenance, car washes, paint, collision repair, and glass services across North America.

Why Is DRVN Not Exciting?

1. Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
2. Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
3. High net-debt-to-EBITDA ratio of 5× could force the company to raise capital at unfavorable terms if market conditions deteriorate

At $17.19 per share, Driven Brands trades at 12.4x forward P/E. To fully understand why you should be careful with DRVN, check out our full research report (it’s free).

Interpublic Group (IPG)

Consensus Price Target: $32.64 (22.2% implied return)

With a history dating back to 1902 and roots in the McCann-Erickson agency, Interpublic Group $(IPG)$ is a marketing and communications holding company that owns agencies specializing in advertising, media buying, public relations, and digital marketing services.

Why Should You Sell IPG?

1. Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
2. Projected sales for the next 12 months are flat and suggest demand will be subdued
3. Free cash flow margin dropped by 17.1 percentage points over the last five years, implying the company became more capital intensive as competition picked up

Interpublic Group is trading at $26.70 per share, or 9.7x forward P/E. Dive into our free research report to see why there are better opportunities than IPG.

Two Harbors Investment (TWO)

Consensus Price Target: $11.71 (22% implied return)

Operating in the complex world of mortgage finance since 2009, Two Harbors Investment (NYSE:TWO) is a real estate investment trust that invests in mortgage servicing rights and agency residential mortgage-backed securities.

Why Do We Think TWO Will Underperform?

1. Net interest income tumbled by 47.1% annually over the last five years, showing market trends are working against its favor during this cycle
2. Incremental sales over the last five years were much less profitable as its earnings per share fell by 20.2% annually while its revenue grew
3. Products and services are facing significant credit quality challenges during this cycle as tangible book value per share has declined by 14.6% annually over the last five years

Two Harbors Investment’s stock price of $9.60 implies a valuation ratio of 0.7x forward P/B. Read our free research report to see why you should think twice about including TWO in your portfolio.

Stocks We Like More

Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

Take advantage of the rebound by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today

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