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.
At StockStory, we look beyond the headlines with our independent analysis to determine whether these bearish calls are justified. Keeping that in mind, here are three stocks where the skepticism is well-placed and some better opportunities to consider.
Chewy (CHWY)
Consensus Price Target: $39.85 (-9.6% implied return)
Founded by Ryan Cohen, who later became known for his involvement in GameStop, Chewy (NYSE: CHWY) is an online retailer specializing in pet food, supplies, and healthcare services.
Why Do We Think Twice About CHWY?
- Sizable revenue base leads to growth challenges as its 9.8% annual revenue increases over the last three years fell short of other consumer internet companies
- Estimated sales growth of 4.5% for the next 12 months implies demand will slow from its three-year trend
- Bad unit economics and steep infrastructure costs are reflected in its low gross margin of 28.8%
Chewy’s stock price of $44.10 implies a valuation ratio of 28x forward EV/EBITDA. If you’re considering CHWY for your portfolio, see our FREE research report to learn more.
Landstar (LSTR)
Consensus Price Target: $142.95 (5.7% implied return)
Covering billions of miles throughout North America, Landstar (NASDAQ: LSTR) is a transportation company specializing in freight and last-mile delivery services.
Why Should You Dump LSTR?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 16.5% annually over the last two years
- Earnings per share were flat over the last five years and fell short of the peer group average
- Eroding returns on capital suggest its historical profit centers are aging
At $135.26 per share, Landstar trades at 23.6x forward P/E. To fully understand why you should be careful with LSTR, check out our full research report (it’s free).
UL Solutions (ULS)
Consensus Price Target: $70.60 (-0.5% implied return)
Founded in 1894 as a response to the growing dangers of electricity in American homes and businesses, UL Solutions (NYSE: ULS) provides testing, inspection, and certification services that help companies ensure their products meet safety, security, and sustainability standards.
Why Are We Cautious About ULS?
- Annual revenue growth of 4.3% over the last three years was below our standards for the business services sector
UL Solutions is trading at $70.99 per share, or 40.6x forward P/E. Dive into our free research report to see why there are better opportunities than ULS.
Stocks We Like 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 9 Market-Beating Stocks. 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free.
