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.
At StockStory, we look beyond the headlines with our independent analysis to determine whether these bearish calls are justified. That said, here is one stock poised to prove Wall Street wrong and two where the outlook is warranted.
Two Stocks to Sell:
Photronics (PLAB)
Consensus Price Target: $51.50 (3% implied return)
Sporting a global footprint of facilities, Photronics (NASDAQ: PLAB) is a manufacturer of photomasks, templates used to transfer patterns onto semiconductor wafers.
Why Is PLAB Not Exciting?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 2% annually over the last two years
- Projected sales growth of 3.8% for the next 12 months suggests sluggish demand
- Gross margin of 35.7% is below its competitors, leaving less money to invest in areas like marketing and R&D
Photronics is trading at $49.98 per share, or 23.6x forward P/E. Read our free research report to see why you should think twice about including PLAB in your portfolio.
Applied Industrial (AIT)
Consensus Price Target: $330 (6.3% implied return)
Formerly called The Ohio Ball Bearing Company, Applied Industrial (NYSE: AIT) distributes industrial products–everything from power tools to industrial valves–and services to a wide variety of industries.
Why Does AIT Fall Short?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Anticipated sales growth of 5.8% for the next year implies demand will be shaky
- Earnings per share lagged its peers over the last two years as they only grew by 5.4% annually
Applied Industrial’s stock price of $310.45 implies a valuation ratio of 27.4x forward P/E. Check out our free in-depth research report to learn more about why AIT doesn’t pass our bar.
One Stock to Watch:
Douglas Dynamics (PLOW)
Consensus Price Target: $54.50 (20.6% implied return)
Once manufacturing snowplows designed for the iconic jeep vehicle precursor, Douglas Dynamics (NYSE: PLOW) offers snow and ice equipment for the roads and sidewalks.
Why Does PLOW Stand Out?
- Sales outlook for the upcoming 12 months calls for 12.9% growth, an acceleration from its two-year trend
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 41.4% annually, topping its revenue gains
- Free cash flow margin increased by 9.4 percentage points over the last five years, giving the company more capital to invest or return to shareholders
At $45.20 per share, Douglas Dynamics trades at 16.9x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
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.
