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. That said, here are three stocks where the outlook is warranted and some alternatives with better fundamentals.
Floor And Decor (FND)
Consensus Price Target: $83.86 (-2.5% implied return)
Operating large, warehouse-style stores, Floor & Decor (NYSE: FND) is a specialty retailer that specializes in hard flooring surfaces for the home such as tiles, hardwood, stone, and laminates.
Why Do We Think Twice About FND?
- Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations
- Capital intensity has ramped up over the last year as its free cash flow margin decreased by 3.2 percentage points
- Below-average returns on capital indicate management struggled to find compelling investment opportunities, and its falling returns suggest its earlier profit pools are drying up
Floor And Decor is trading at $86 per share, or 45.1x forward P/E. Read our free research report to see why you should think twice about including FND in your portfolio.
Hanesbrands (HBI)
Consensus Price Target: $6.26 (-1% implied return)
A classic American staple founded in 1901, Hanesbrands (NYSE: HBI) is a clothing company known for its array of basic apparel including innerwear and activewear.
Why Do We Think HBI Will Underperform?
- Weak constant currency growth over the past two years indicates challenges in maintaining its market share
- Projected sales for the next 12 months are flat and suggest demand will be subdued
- Earnings per share decreased by more than its revenue over the last five years, showing each sale was less profitable
Hanesbrands’s stock price of $6.32 implies a valuation ratio of 11.7x forward P/E. To fully understand why you should be careful with HBI, check out our full research report (it’s free).
DXC (DXC)
Consensus Price Target: $15.13 (8.1% implied return)
Born from the 2017 merger of Computer Sciences Corporation and HP Enterprise's services business, DXC Technology (NYSE: DXC) is a global IT services company that helps businesses transform their technology infrastructure, applications, and operations.
Why Is DXC Risky?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Earnings per share have dipped by 3.6% annually over the past five years, which is concerning because stock prices follow EPS over the long term
- ROIC of 1.2% reflects management’s challenges in identifying attractive investment opportunities, and its decreasing returns suggest its historical profit centers are aging
At $13.99 per share, DXC trades at 4.6x forward P/E. Dive into our free research report to see why there are better opportunities than DXC.
Stocks We Like More
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound 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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