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 are three stocks where the outlook is warranted and some alternatives with better fundamentals.
Grocery Outlet (GO)
Consensus Price Target: $8.46 (-11.3% implied return)
Due to its differentiated procurement and buying approach, Grocery Outlet (NASDAQ: GO) is a discount grocery store chain that offers substantial discounts on name-brand products.
Why Should You Sell GO?
- Poor same-store sales performance over the past two years indicates it’s having trouble bringing new shoppers into its brick-and-mortar locations
- Day-to-day expenses have swelled relative to revenue over the last year as its operating margin fell by 9.2 percentage points
- High net-debt-to-EBITDA ratio of 7× could force the company to raise capital on unfavorable terms if market conditions deteriorate
At $9.54 per share, Grocery Outlet trades at 18.7x forward P/E. Dive into our free research report to see why there are better opportunities than GO.
Invesco (IVZ)
Consensus Price Target: $29.59 (14.4% implied return)
With roots dating back to 1935 when it pioneered the first mutual fund with an objective of capital growth, Invesco (NYSE: IVZ) is a global asset management firm that offers investment solutions across equities, fixed income, alternatives, and multi-asset strategies.
Why Is IVZ Risky?
- Sales stagnated over the last five years and signal the need for new growth strategies
- Earnings per share fell by 1.1% annually over the last five years while its revenue was flat, showing each sale was less profitable
- 6× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings
Invesco is trading at $25.88 per share, or 9.7x forward P/E. Read our free research report to see why you should think twice about including IVZ in your portfolio.
TriCo Bancshares (TCBK)
Consensus Price Target: $56 (4.7% implied return)
Founded in 1975 and headquartered in Chico, California, TriCo Bancshares (NASDAQ: TCBK) operates Tri Counties Bank, providing personal, small business, and commercial banking services through branches across California.
Why Are We Cautious About TCBK?
- 6.6% annual net interest income growth over the last five years was slower than its banking peers
- Earnings per share lagged its peers over the last five years as they only grew by 7.4% annually
- Estimated tangible book value per share growth of 8.9% for the next 12 months implies profitability will slow from its two-year trend
TriCo Bancshares’s stock price of $53.47 implies a valuation ratio of 1.2x forward P/B. If you’re considering TCBK for your portfolio, see our FREE research report to learn more.
Stocks We Like More
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 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.
