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. That said, here are two stocks poised to prove Wall Street wrong and one where the outlook is warranted.
One Stock to Sell:
Xerox (XRX)
Consensus Price Target: $2.75 (1.5% implied return)
Pioneering the modern office copier and inventing technologies like Ethernet and the laser printer, Xerox (NASDAQ: XRX) provides document management systems, printing technology, and workplace solutions to businesses of all sizes across the globe.
Why Do We Avoid XRX?
- Annual revenue growth of 1.5% over the last five years was below our standards for the business services sector
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
- 7× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings
At $2.71 per share, Xerox trades at 9.3x forward P/E. Read our free research report to see why you should think twice about including XRX in your portfolio.
Two Stocks to Watch:
Cardinal Health (CAH)
Consensus Price Target: $250.73 (10.5% implied return)
Operating as a critical link in the healthcare supply chain since 1979, Cardinal Health (NYSE: CAH) distributes pharmaceuticals and manufactures medical products for hospitals, pharmacies, and healthcare providers across the global healthcare supply chain.
Why Are We Positive on CAH?
- Dominant market position is represented by its $250.7 billion in revenue, which creates significant barriers to entry in this highly regulated industry
- Forecasted revenue growth of 8.1% for the next 12 months suggests stronger momentum versus most peers
- Performance over the past five years was boosted by share buybacks, which enabled its earnings per share to grow faster than its revenue
Cardinal Health is trading at $227.00 per share, or 19.6x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
The Bancorp (TBBK)
Consensus Price Target: $73.67 (9.7% implied return)
Operating behind the scenes of many popular fintech apps and prepaid cards you might use daily, The Bancorp (NASDAQ: TBBK) is a bank holding company that specializes in providing banking services to fintech companies and offering specialty lending products.
Why Should You Buy TBBK?
- Annual net interest income growth of 12.6% over the last five years beat the sector average and underscores the value of its loans
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 26.3% exceeded its revenue gains over the last five years
- Industry-leading 24.7% return on equity demonstrates management’s skill in finding high-return investments
The Bancorp’s stock price of $67.16 implies a valuation ratio of 3.6x forward P/B. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
Stocks We Like Even More
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating 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.
