When Wall Street turns bearish on a stock, it’s worth paying attention. These calls stand out because analysts rarely issue grim ratings on companies for fear their firms will lose out in other business lines such as M&A advisory.
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 is one stock poised to prove Wall Street wrong and two facing legitimate challenges.
Two Stocks to Sell:
Hudson Technologies (HDSN)
Consensus Price Target: $10.25 (4.5% implied return)
Founded in 1991, Hudson Technologies (NASDAQ: HDSN) specializes in refrigerant services and solutions, providing refrigerant sales, reclamation, and recycling.
Why Are We Cautious About HDSN?
- Annual sales declines of 14.1% for the past two years show its products and services struggled to connect with the market during this cycle
- Earnings per share have contracted by 46.8% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
- Eroding returns on capital suggest its historical profit centers are aging
Hudson Technologies is trading at $9.81 per share, or 11x forward EV-to-EBITDA. To fully understand why you should be careful with HDSN, check out our full research report (it’s free).
AGCO (AGCO)
Consensus Price Target: $121.46 (7.4% implied return)
With a history that features both organic growth and acquisitions, AGCO (NYSE: AGCO) designs, manufactures, and sells agricultural machinery and related technology.
Why Do We Avoid AGCO?
- 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
- Sales were less profitable over the last two years as its earnings per share fell by 70% annually, worse than its revenue declines
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
At $113.08 per share, AGCO trades at 22.4x forward P/E. Check out our free in-depth research report to learn more about why AGCO doesn’t pass our bar.
One Stock to Buy:
AutoZone (AZO)
Consensus Price Target: $4,146 (-0.2% implied return)
Aiming to be a one-stop shop for the DIY customer, AutoZone (NYSE: AZO) is an auto parts and accessories retailer that sells everything from car batteries to windshield wiper fluid to brake pads.
Why Are We Backing AZO?
- Same-store sales provide a solid foundation for the steady expansion of its stores
- Collection of products is difficult to replicate at scale and leads to a best-in-class gross margin of 51.8%
- AZO is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
AutoZone’s stock price of $4,154 implies a valuation ratio of 24.7x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Donald Trump’s April 2024 "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.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check 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).
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