1 of Wall Street’s favorite stocks for long-term investors and 2 we brush off

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.

At StockStory, we look beyond the headlines with our independent analysis to determine whether these bullish calls are justified. That said, here is one stock where Wall Street's positive outlook is supported by strong fundamentals and two where its enthusiasm might be excessive.

Two stocks to sell:

IPG Photonics (IPGP)

Consensus price target: $124.14 (66.9% implied return)

Both a designer and manufacturer of its products, IPG Photonics (NASDAQ:IPGP) is a provider of high-performance fiber lasers used for cutting, welding, and processing raw materials.

Why Do We Pass on IPGP?

1. Customers postponed purchases of its products and services this cycle as its revenue declined by 4.9% annually over the last five years

2. Overall productivity fell over the last five years as its plummeting sales were accompanied by a decline in its operating margin

3. Sales were less profitable over the last five years as its earnings per share fell by 18.3% annually, worse than its revenue declines

At $74.40 per share, IPG Photonics trades at 35.4x forward P/E. If you're considering IPGP for your portfolio, see our FREE research report to learn more .

ArcBest (ARCB)

Consensus price target: $166.85 (27.9% implied return)

Historically owning furniture, banking, and other subsidiaries, ArcBest (NASDAQ:ARCB) offers full-truckload, less-than-truckload, and intermodal deliveries of freight.

Why Is ARCB Risky?

1. Disappointing unit sales over the past two years imply it may need to invest in improvements to get back on track

2. Incremental sales over the last five years were much less profitable as its earnings per share fell by 2.7% annually while its revenue grew

3. Waning returns on capital imply its previous profit engines are losing steam

ArcBest is trading at $130.50 per share, or 15x forward P/E. Check out our free in-depth research report to learn more about why ARCB doesn't pass our bar .

One stock to buy:

VSE Corporation (VSEC)

Consensus price target: $257.11 (73.3% implied return)

With roots dating back to 1959 and a strategic focus on extending the life of transportation assets, VSE Corporation (NASDAQ:VSEC) provides aftermarket parts distribution and maintenance, repair, and overhaul services for aircraft and vehicle fleets in commercial and government markets.