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.
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 are three stocks where the outlook is warranted and some alternatives with better fundamentals.
Brown-Forman (BF.B)
Consensus Price Target: $31.28 (7% implied return)
Best known for its Jack Daniel’s whiskey, Brown-Forman (NYSE: BF.B) is an alcoholic beverage company with a broad portfolio of brands in wines and spirits.
Why Is BF.B Not Exciting?
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- Estimated sales decline of 3% for the next 12 months implies an even more challenging demand environment
- Day-to-day expenses have swelled relative to revenue over the last year as its operating margin fell by 6 percentage points
Brown-Forman is trading at $29.25 per share, or 15.3x forward P/E. Dive into our free research report to see why there are better opportunities than BF.B.
Hilton Grand Vacations (HGV)
Consensus Price Target: $53.33 (20.5% implied return)
Spun off from Hilton Worldwide in 2017, Hilton Grand Vacations (NYSE: HGV) is a global timeshare company that provides travel experiences for its customers through its timeshare resorts and club membership programs.
Why Are We Wary of HGV?
- 11.2% annual revenue growth over the last two years was slower than its consumer discretionary peers
- Low returns on capital reflect management’s struggle to allocate funds effectively
- High net-debt-to-EBITDA ratio could force the company to raise capital at unfavorable terms if market conditions deteriorate
At $44.26 per share, Hilton Grand Vacations trades at 12x forward P/E. Read our free research report to see why you should think twice about including HGV in your portfolio.
Acuity Brands (AYI)
Consensus Price Target: $333.38 (7.4% implied return)
One of the pioneers of smart lights, Acuity (NYSE: AYI) designs and manufactures light fixtures and building management systems used in various industries.
Why Does AYI Give Us Pause?
- Sales trends were unexciting over the last two years as its 1.4% annual growth was below the typical industrials company
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
Acuity Brands’s stock price of $310.35 implies a valuation ratio of 16.7x forward P/E. If you’re considering AYI for your portfolio, see our FREE research report to learn more.
High-Quality Stocks for All Market Conditions
Trump’s April 2024 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 5 Strong Momentum Stocks for this week. 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
