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.
Accurately determining a company’s long-term prospects isn’t easy, especially when sentiment is weak. That’s where StockStory comes in - to help you find attractive investment candidates backed by unbiased research. Keeping that in mind, here is one stock where you should be greedy instead of fearful and two where the outlook is warranted.
Two Stocks to Sell:
Huntington Ingalls (HII)
Consensus Price Target: $258.59 (0.5% implied return)
Building Nimitz-class aircraft carriers used in active service, Huntington Ingalls (NYSE: HII) develops marine vessels and their mission systems and maintenance services.
Why Is HII Risky?
- Average backlog growth of 1.8% over the past two years was mediocre and suggests fewer customers signed long-term contracts
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 9.2 percentage points
- Eroding returns on capital suggest its historical profit centers are aging
Huntington Ingalls’s stock price of $257.29 implies a valuation ratio of 17.9x forward P/E. Read our free research report to see why you should think twice about including HII in your portfolio.
Hertz (HTZ)
Consensus Price Target: $3.99 (-48.8% implied return)
Started with a dozen Model T Fords, Hertz (NASDAQ: HTZ) is a global car rental company providing vehicle rental services to leisure and business travelers.
Why Do We Pass on HTZ?
- Weak unit sales over the past two years indicate demand is soft and that the company may need to revise its strategy
- Diminishing returns on capital suggest its earlier profit pools are drying up
- Short cash runway increases the probability of a capital raise that dilutes existing shareholders
At $7.80 per share, Hertz trades at 6.5x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why HTZ doesn’t pass our bar.
One Stock to Watch:
Broadridge (BR)
Consensus Price Target: $255.65 (9.3% implied return)
Processing over $10 trillion in equity and fixed income trades daily and managing proxy voting for over 800 million equity positions, Broadridge Financial Solutions (NYSE: BR) provides technology-driven solutions that power investing, governance, and communications for banks, broker-dealers, asset managers, and public companies.
Why Do We Like BR?
- Impressive 9.1% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Incremental sales over the last five years have been more profitable as its earnings per share increased by 11.7% annually, topping its revenue gains
- Free cash flow margin increased by 4.4 percentage points over the last five years, giving the company more capital to invest or return to shareholders
Broadridge is trading at $234 per share, or 26.3x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
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 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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