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. That said, here are two stocks where you should be greedy instead of fearful and one where the skepticism is well-placed.
One Stock to Sell:
Playa Hotels & Resorts (PLYA)
Consensus Price Target: $13.81 (2.4% implied return)
Sporting a roster of beachfront properties, Playa Hotels & Resorts (NASDAQ: PLYA) is an owner, operator, and developer of all-inclusive resorts in prime vacation destinations.
Why Are We Wary of PLYA?
- Softer revenue per room over the past two years suggests it might have to invest in new amenities such as restaurants and bars to attract customers
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 7.6%
- Underwhelming 5% return on capital reflects management’s difficulties in finding profitable growth opportunities
Playa Hotels & Resorts is trading at $13.48 per share, or 21.7x forward P/E. Dive into our free research report to see why there are better opportunities than PLYA.
Two Stocks to Watch:
Sprouts (SFM)
Consensus Price Target: $182.93 (10.9% implied return)
Playing on the secular trend of healthier living, Sprouts Farmers Market (NASDAQ: SFM) is a grocery store chain emphasizing natural and organic products.
Why Do We Watch SFM?
- Fast expansion of new stores to reach markets with few or no locations is justified by its same-store sales growth
- Comparable store sales rose by 6.6% on average over the past two years, demonstrating its ability to drive increased spending at existing locations
- Projected revenue growth of 11.6% for the next 12 months is above its six-year trend, pointing to accelerating demand
Sprouts’s stock price of $165.01 implies a valuation ratio of 33.9x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
Hubbell (HUBB)
Consensus Price Target: $427.54 (-0.3% implied return)
A respected player in the electrical segment, Hubbell (NYSE: HUBB) manufactures electronic products for the construction, industrial, utility, and telecommunications markets.
Why Do We Like HUBB?
- Operating margin improvement of 6.2 percentage points over the last five years demonstrates its ability to scale efficiently
- Additional sales over the last two years increased its profitability as the 16.6% annual growth in its earnings per share outpaced its revenue
- ROIC punches in at 25.5%, illustrating management’s expertise in identifying profitable investments, and its returns are growing as it capitalizes on even better market opportunities
At $428.96 per share, Hubbell trades at 24x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
When Trump unveiled his aggressive tariff plan in April 2024, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 5 Strong Momentum Stocks for this week. 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. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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