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 where the skepticism is well-placed.
Two Stocks to Sell:
Sally Beauty (SBH)
Consensus Price Target: $17 (3.7% implied return)
Catering to both everyday consumers as well as salon professionals, Sally Beauty (NYSE: SBH) is a retailer that sells salon-quality beauty products such as makeup and haircare products.
Why Do We Steer Clear of SBH?
- Failure to add new stores points to soft demand and a focus on boosting sales at current locations
- Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations
- Subscale operations are evident in its revenue base of $3.73 billion, meaning it has fewer distribution channels than its larger rivals
Sally Beauty is trading at $16.40 per share, or 7.5x forward P/E. Dive into our free research report to see why there are better opportunities than SBH.
Starbucks (SBUX)
Consensus Price Target: $112.23 (5.1% implied return)
Started by three friends in Seattle’s historic Pike Place Market, Starbucks (NASDAQ: SBUX) is a globally-renowned coffeehouse chain that offers a wide selection of high-quality coffee, beverages, and food items.
Why Are We Cautious About SBUX?
- Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
- Estimated sales decline of 1.5% for the next 12 months implies a challenging demand environment
- Efficiency has decreased over the last year as its operating margin fell by 3 percentage points
At $106.74 per share, Starbucks trades at 36x forward P/E. Read our free research report to see why you should think twice about including SBUX in your portfolio.
One Stock to Watch:
Butterfield Bank (NTB)
Consensus Price Target: $64 (7.4% implied return)
Founded in 1784 as one of the oldest banks in the Western Hemisphere, Butterfield Bank (NYSE: NTB) provides banking, wealth management, and trust services to individuals and businesses in select offshore financial centers including Bermuda, Cayman Islands, and the Channel Islands.
Why Are We Fans of NTB?
- Market share is on track to rise over the next 12 months as its 32.8% projected net interest income growth implies demand will accelerate from its five-year trend
- Exciting tangible book value per share outlook for the upcoming 12 months calls for 30.4% growth, an acceleration from its two-year trend
- Stellar return on equity showcases management’s ability to surface highly profitable business ventures
Butterfield Bank’s stock price of $59.62 implies a valuation ratio of 1.8x forward P/B. 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
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
