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.
Whatever the consensus opinion may be, our team at StockStory cuts through the noise by conducting independent analysis to determine a company’s long-term prospects. Keeping that in mind, here is one stock poised to prove Wall Street wrong and two facing legitimate challenges.
Two Stocks to Sell:
Johnson Controls (JCI)
Consensus Price Target: $114.47 (8.9% implied return)
Founded after patenting the electric room thermostat, Johnson Controls (NYSE: JCI) specializes in building products and technology solutions, including HVAC systems, fire and security systems, and energy storage.
Why Do We Think JCI Will Underperform?
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- Estimated sales growth of 4.2% for the next 12 months is soft and implies weaker demand
- Underwhelming 7.3% return on capital reflects management’s difficulties in finding profitable growth opportunities, and its decreasing returns suggest its historical profit centers are aging
At $105.11 per share, Johnson Controls trades at 25.2x forward P/E. Read our free research report to see why you should think twice about including JCI in your portfolio.
Rivian (RIVN)
Consensus Price Target: $14.13 (-10.1% implied return)
The manufacturer of Amazon’s delivery trucks, Rivian (NASDAQ: RIVN) designs, manufactures, and sells electric vehicles and commercial delivery vans.
Why Does RIVN Fall Short?
- Negative 49.3% gross margin means it loses money on every sale and must pivot or scale quickly to survive
- Cash-burning history makes us doubt the long-term viability of its business model
- Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution
Rivian is trading at $15.71 per share, or 3.2x forward price-to-sales. If you’re considering RIVN for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
Reddit (RDDT)
Consensus Price Target: $216.73 (-6.8% implied return)
Founded in 2005 by two University of Virginia roommates, Reddit (NYSE: RDDT) facilitates user-generated content across niche communities (called subreddits) that discuss anything from stocks to dating and memes.
Why Is RDDT a Top Pick?
- Has the opportunity to boost monetization through new features and premium offerings as its domestic daily active visitors have grown by 33.7% annually over the last two years
- Earnings growth has massively outpaced its peers over the last three years as its EPS has compounded at 38.6% annually
- Free cash flow margin increased by 35.1 percentage points over the last few years, giving the company more capital to invest or return to shareholders
Reddit’s stock price of $232.50 implies a valuation ratio of 60.8x forward EV/EBITDA. 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 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 6 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 Tecnoglass (+1,754% 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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