When Wall Street turns bearish on a stock, it’s worth paying attention. These calls stand out because analysts rarely issue grim ratings on companies for fear their firms will lose out in other business lines such as M&A advisory.

At StockStory, we look beyond the headlines with our independent analysis to determine whether these bearish calls are justified. Keeping that in mind, here is one stock where you should be greedy instead of fearful and two facing legitimate challenges.

Two Stocks to Sell:

Victoria's Secret (VSCO)

Consensus Price Target: $23.09 (0.4% implied return)

Spun off from L Brands in 2020, Victoria’s Secret (NYSE: VSCO) is an intimate clothing and beauty retailer that sells its own brands of lingerie, undergarments, and personal fragrances.

Why Do We Pass on VSCO?

1. Poor same-store sales performance over the past two years indicates it’s having trouble bringing new shoppers into its brick-and-mortar locations
2. Responsiveness to unforeseen market trends is restricted due to its substandard operating profitability
3. Falling earnings per share over the last three years has some investors worried as stock prices ultimately follow EPS over the long term

At $23 per share, Victoria's Secret trades at 8.5x forward P/E. To fully understand why you should be careful with VSCO, check out our full research report (it’s free).

Darden (DRI)

Consensus Price Target: $206.72 (-0.2% implied return)

Founded in 1968 as Red Lobster, Darden (NYSE: DRI) is a leading American restaurant company that owns and operates a portfolio of popular restaurant brands.

Why Do We Think Twice About DRI?

1. Sizable revenue base leads to growth challenges as its 5.7% annual revenue increases over the last six years fell short of other restaurant companies
2. Disappointing same-store sales over the past two years show customers aren’t responding well to its menu offerings and dining experience
3. Challenging supply chain dynamics and bad unit economics are reflected in its low gross margin of 21.3%

Darden’s stock price of $207.04 implies a valuation ratio of 20.3x forward P/E. If you’re considering DRI for your portfolio, see our FREE research report to learn more.

One Stock to Buy:

AAON (AAON)

Consensus Price Target: $111.25 (6.5% implied return)

Backed by two million square feet of lab testing space, AAON (NASDAQ: AAON) makes heating, ventilation, and air conditioning equipment for different types of buildings.

Why Will AAON Beat the Market?

1. Annual revenue growth of 20.7% over the past five years was outstanding, reflecting market share gains this cycle
2. Earnings per share have massively outperformed its peers over the last five years, increasing by 18.2% annually
3. Industry-leading 20.7% return on capital demonstrates management’s skill in finding high-return investments

AAON is trading at $104.50 per share, or 43.2x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.

High-Quality Stocks for All Market Conditions

Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.

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