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 facing legitimate challenges and some alternatives worth exploring instead.
EnerSys (ENS)
Consensus Price Target: $120 (-4.7% implied return)
Supplying batteries that power equipment as big as mining rigs, EnerSys (NYSE: ENS) manufactures various kinds of batteries for a range of industries.
Why Do We Think Twice About ENS?
- Declining unit sales over the past two years show it’s struggled to increase its sales volumes and had to rely on price increases
- Anticipated sales growth of 1.6% for the next year implies demand will be shaky
- Low free cash flow margin of 4.2% for the last five years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
EnerSys’s stock price of $125.88 implies a valuation ratio of 12.4x forward P/E. Dive into our free research report to see why there are better opportunities than ENS.
Steelcase (SCS)
Consensus Price Target: $16.83 (5.4% implied return)
Founded in 1912 when metal office furniture was replacing wooden alternatives, Steelcase (NYSE: SCS) is a global office furniture manufacturer that designs and produces workplace solutions including desks, chairs, architectural products, and services.
Why Do We Pass on SCS?
- Sales stagnated over the last five years and signal the need for new growth strategies
- Flat earnings per share over the last five years lagged its peers
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
At $15.96 per share, Steelcase trades at 13.3x forward P/E. Check out our free in-depth research report to learn more about why SCS doesn’t pass our bar.
MDU Resources (MDU)
Consensus Price Target: $20.60 (5.9% implied return)
Founded to provide electricity to towns in Minnesota, MDU Resources (NYSE: MDU) provides products and services in the utilities and construction materials industries.
Why Do We Think MDU Will Underperform?
- Annual sales declines of 37.6% for the past five years show its products and services struggled to connect with the market during this cycle
- Earnings per share have contracted by 9.9% annually over the last five years, a headwind for returns as stock prices often echo long-term EPS performance
- 7× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly
MDU Resources is trading at $19.45 per share, or 20.1x forward P/E. Read our free research report to see why you should think twice about including MDU in your portfolio.
Stocks We Like More
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
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