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.

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 outlook is warranted and some alternatives with better fundamentals.

Charles River Laboratories (CRL)

Consensus Price Target: $177.07 (15.5% implied return)

Named after the Massachusetts river where it was founded in 1947, Charles River Laboratories (NYSE: CRL) provides non-clinical drug development services, research models, and manufacturing support to pharmaceutical and biotechnology companies.

Why Does CRL Fall Short?

1. Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
2. Demand will likely be weak over the next 12 months as Wall Street expects flat revenue
3. Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results

At $153.27 per share, Charles River Laboratories trades at 15.3x forward P/E. If you’re considering CRL for your portfolio, see our FREE research report to learn more.

Fulton Financial (FULT)

Consensus Price Target: $20.80 (7.9% implied return)

Tracing its roots back to 1882 in the heart of Pennsylvania, Fulton Financial (NASDAQ: FULT) is a financial holding company that provides banking, lending, and wealth management services to consumers and businesses across five Mid-Atlantic states.

Why Do We Think Twice About FULT?

1. Estimated net interest income growth of 1.9% for the next 12 months implies demand will slow from its five-year trend
2. Anticipated 2.8 percentage point rise in its efficiency ratio suggests its expenses will increase as a percentage of revenue
3. 4.3% annual tangible book value per share growth over the last five years was slower than its banking peers

Fulton Financial is trading at $19.27 per share, or 1.1x forward P/B. Check out our free in-depth research report to learn more about why FULT doesn’t pass our bar.

Prospect Capital (PSEC)

Consensus Price Target: $2.50 (-11.3% implied return)

Operating as one of the largest publicly traded business development companies in the United States, Prospect Capital (NASDAQ: PSEC) provides debt and equity financing to middle-market companies across various industries.

Why Should You Sell PSEC?

1. Sales tumbled by 8.1% annually over the last two years, showing market trends are working against its favor during this cycle
2. Sales were less profitable over the last two years as its earnings per share fell by 12.7% annually, worse than its revenue declines
3. Annual tangible book value per share declines of 4.3% for the past five years show its capital management struggled during this cycle

Prospect Capital’s stock price of $2.82 implies a valuation ratio of 5.9x forward P/E. Read our free research report to see why you should think twice about including PSEC in your portfolio.

Stocks We Like More

When Trump unveiled his aggressive tariff plan in April 2025, 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 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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