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 is one stock where you should be greedy instead of fearful and two where the skepticism is well-placed.
Two Stocks to Sell:
Masco (MAS)
Consensus Price Target: $69.91 (5.3% implied return)
Headquartered just outside of Detroit, MI, Masco (NYSE: MAS) designs and manufactures home-building products such as glass shower doors, decorative lighting, bathtubs, and faucets.
Why Is MAS Risky?
- 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 for the next 12 months are flat and imply a softer demand environment
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
At $66.38 per share, Masco trades at 15.3x forward P/E. Dive into our free research report to see why there are better opportunities than MAS.
United Bankshares (UBSI)
Consensus Price Target: $39.33 (3.3% implied return)
With roots dating back to 1982 and a strong presence in the Mid-Atlantic region, United Bankshares (NASDAQ: UBSI) is a bank holding company that provides commercial and retail banking services through its United Bank subsidiary across multiple states.
Why Are We Wary of UBSI?
- Sales were flat over the last two years, indicating it’s failed to expand this cycle
- Net interest income trends were unexciting over the last four years as its 6.4% annual growth was below the typical bank company
- Capital trends were unexciting over the last two years as its 7.3% annual tangible book value per share growth was below the typical bank company
United Bankshares’s stock price of $38.09 implies a valuation ratio of 1x forward P/B. If you’re considering UBSI for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
Bloom Energy (BE)
Consensus Price Target: $22.89 (-5.6% implied return)
Working in stealth mode for eight years, Bloom Energy (NYSE: BE) designs, manufactures, and markets solid oxide fuel cell systems for on-site power generation.
Why Do We Love BE?
- Impressive 14.5% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 68.2% over the last two years outstripped its revenue performance
- Free cash flow margin is now positive, showing the company has crossed a key inflection point
Bloom Energy is trading at $24.24 per share, or 54.1x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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