Wall Street’s bearish price targets for the stocks in this article signal serious concerns. Such forecasts are uncommon in an industry where maintaining cordial corporate relationships often trumps delivering the hard truth.
Whatever the consensus opinion may be, our team at StockStory cuts through the noise by conducting independent analysis to determine a company’s long-term prospects. Keeping that in mind, here is one stock where you should be greedy instead of fearful and two where the skepticism is well-placed.
Two Stocks to Sell:
Arrow Electronics (ARW)
Consensus Price Target: $118.26 (2.4% implied return)
Founded as a single retail store, Arrow Electronics (NYSE: ARW) provides electronic components and enterprise computing solutions to businesses globally.
Why Is ARW Risky?
- Flat sales over the last five years suggest it must find different ways to grow during this cycle
- Earnings per share have contracted by 32.1% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
- Diminishing returns on capital suggest its earlier profit pools are drying up
Arrow Electronics is trading at $115.46 per share, or 9.8x forward P/E. Check out our free in-depth research report to learn more about why ARW doesn’t pass our bar.
Avnet (AVT)
Consensus Price Target: $51.25 (5.2% implied return)
With a century-long history of adapting to technological evolution, Avnet (NASDAQ: AVT) is a global electronic components distributor that connects manufacturers of semiconductors and other electronic parts with businesses that need these components.
Why Does AVT Give Us Pause?
- Sales tumbled by 8.3% annually over the last two years, showing market trends are working against its favor during this cycle
- Earnings per share have dipped by 31% annually over the past two years, which is concerning because stock prices follow EPS over the long term
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
Avnet’s stock price of $48.71 implies a valuation ratio of 9.7x forward P/E. Dive into our free research report to see why there are better opportunities than AVT.
One Stock to Buy:
Amphenol (APH)
Consensus Price Target: $85.26 (5.5% implied return)
With over 90 years of connecting the world's technologies, Amphenol (NYSE: APH) designs and manufactures connectors, cables, sensors, and interconnect systems that enable electrical and electronic connections across virtually every industry.
Why Are We Backing APH?
- Market share has increased this cycle as its 15.2% annual revenue growth over the last two years was exceptional
- Dominant market position is represented by its $16.78 billion in revenue and gives it fixed cost leverage when sales grow
- Earnings growth has massively outpaced its peers over the last five years as its EPS has compounded at 19% annually
At $80.84 per share, Amphenol trades at 33.9x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks That Overcame Trump’s 2018 Tariffs
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Axon (+711% five-year return). Find your next big winner with StockStory today for free.
