Wall Street has issued downbeat forecasts for the stocks in this article. These predictions are rare - financial institutions typically hesitate to say bad things about a company because it can jeopardize their other revenue-generating business lines like 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 where Wall Street’s pessimism is creating a buying opportunity and two where the skepticism is well-placed.
Two Stocks to Sell:
Analog Devices (ADI)
Consensus Price Target: $267.47 (9.1% implied return)
Founded by two MIT graduates, Ray Stata and Matthew Lorber in 1965, Analog Devices (NASDAQ: ADI) is one of the largest providers of high performance analog integrated circuits used mainly in industrial end markets, along with communications, autos, and consumer devices.
Why Are We Cautious About ADI?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 10.1% annually over the last two years
- Efficiency has decreased over the last five years as its operating margin fell by 7 percentage points
- ROIC of 6.5% reflects management’s challenges in identifying attractive investment opportunities, and its decreasing returns suggest its historical profit centers are aging
Analog Devices is trading at $245.27 per share, or 29x forward P/E. Check out our free in-depth research report to learn more about why ADI doesn’t pass our bar.
Krispy Kreme (DNUT)
Consensus Price Target: $4.03 (17.6% implied return)
Famous for its Original Glazed doughnuts and parent company of Insomnia Cookies, Krispy Kreme (NASDAQ: DNUT) is one of the most beloved and well-known fast-food chains in the world.
Why Do We Pass on DNUT?
- Earnings per share have dipped by 38.7% annually over the past three years, which is concerning because stock prices follow EPS over the long term
- Long-term business health is up for debate as its cash burn has increased over the last year
- Short cash runway increases the probability of a capital raise that dilutes existing shareholders
At $3.43 per share, Krispy Kreme trades at 3.9x forward EV-to-EBITDA. To fully understand why you should be careful with DNUT, check out our full research report (it’s free).
One Stock to Watch:
Dick's (DKS)
Consensus Price Target: $240.81 (8.3% implied return)
Started as a hunting supply store, Dick’s Sporting Goods (NYSE: DKS) is a retailer that sells merchandise for traditional sports as well as for fitness and outdoor activities.
Why Does DKS Stand Out?
- Comparable store sales rose by 4.3% on average over the past two years, demonstrating its ability to drive increased spending at existing locations
- Exciting sales outlook for the upcoming 12 months calls for 54.9% growth, an acceleration from its six-year trend
- ROIC punches in at 24.3%, illustrating management’s expertise in identifying profitable investments
Dick’s stock price of $222.29 implies a valuation ratio of 14.9x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 9 Market-Beating Stocks. 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-small-cap company Exlservice (+354% 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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