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 poised to prove Wall Street wrong and two facing legitimate challenges.
Two Stocks to Sell:
Ralph Lauren (RL)
Consensus Price Target: $308.83 (11.9% implied return)
Originally founded as a necktie company, Ralph Lauren (NYSE:RL) is an iconic American fashion brand known for its classic and sophisticated style.
Why Do We Think Twice About RL?
- Sales trends were unexciting over the last five years as its 2.8% annual growth was below the typical consumer discretionary company
- Constant currency revenue growth has disappointed over the past two years and shows demand was soft
- Estimated sales growth of 4.6% for the next 12 months is soft and implies weaker demand
Ralph Lauren is trading at $276 per share, or 20.5x forward P/E. To fully understand why you should be careful with RL, check out our full research report (it’s free).
MSA Safety (MSA)
Consensus Price Target: $177.25 (9.5% implied return)
Founded in 1914 as Mine Safety Appliances to protect coal miners from dangerous gases, MSA Safety (NYSE:MSA) designs and manufactures advanced safety products that protect workers and facilities across industries including fire service, energy, construction, and manufacturing.
Why Does MSA Worry Us?
- Modest revenue base of $1.82 billion gives it less fixed cost leverage and fewer distribution channels than larger companies
- Estimated sales growth of 3.5% for the next 12 months implies demand will slow from its two-year trend
- Free cash flow margin has stayed in place over the last five years
At $161.84 per share, MSA Safety trades at 19.5x forward P/E. Check out our free in-depth research report to learn more about why MSA doesn’t pass our bar.
One Stock to Watch:
Ingersoll Rand (IR)
Consensus Price Target: $89.23 (11.6% implied return)
Started with the invention of the steam drill, Ingersoll Rand (NYSE:IR) provides mission-critical air, gas, liquid, and solid flow creation solutions.
Why Do We Like IR?
- Operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
- Additional sales over the last five years increased its profitability as the 17.2% annual growth in its earnings per share outpaced its revenue
- Robust free cash flow margin of 15.7% gives it many options for capital deployment, and its growing cash flow gives it even more resources to deploy
Ingersoll Rand’s stock price of $79.96 implies a valuation ratio of 23.5x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free.