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.
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. Keeping that in mind, here are three stocks where the outlook is warranted and some alternatives with better fundamentals.
American Express Global Business Travel (GBTG)
Consensus Price Target: $9.75 (2.8% implied return)
Originally spun off from American Express in 2014 but maintaining the Amex GBT brand, Global Business Travel Group (NYSE:GBTG) provides end-to-end business travel and expense management solutions, connecting corporate clients with travel suppliers and offering specialized software services.
Why Are We Hesitant About GBTG?
- Estimated sales growth of 7.8% for the next 12 months implies demand will slow from its two-year trend
- Gross margin of 58.5% reflects its high servicing costs
- Day-to-day expenses have swelled relative to revenue over the last year as its operating margin fell by 3.8 percentage points
American Express Global Business Travel is trading at $9.48 per share, or 1.4x forward price-to-sales. Read our free research report to see why you should think twice about including GBTG in your portfolio.
Albany (AIN)
Consensus Price Target: $62 (6.2% implied return)
Founded in 1895, Albany (NYSE:AIN) is a global textiles and materials processing company, specializing in machine clothing for paper mills and engineered composite structures for aerospace and other industries.
Why Are We Bearish on AIN?
- Sales tumbled by 1.1% annually over the last two years, showing market trends are working against it during this cycle
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 5.7% annually
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
Albany’s stock price of $58.36 implies a valuation ratio of 1.4x trailing 12-month price-to-sales. Check out our free in-depth research report to learn more about why AIN doesn’t pass our bar.
RenaissanceRe (RNR)
Consensus Price Target: $346.40 (5.2% implied return)
Born in Bermuda after the devastating Hurricane Andrew created a crisis in the catastrophe insurance market, RenaissanceRe (NYSE:RNR) provides property, casualty, and specialty reinsurance and insurance solutions to customers worldwide, primarily through intermediaries.
Why Are We Wary of RNR?
- Net premiums earned remained stagnant over the last two years, indicating expansion challenges this cycle
- Forecasted revenue decline of 9% for the upcoming 12 months implies demand will fall off a cliff
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 11.6% annually
At $329.43 per share, RenaissanceRe trades at 1.2x forward P/B. If you’re considering RNR for your portfolio, see our FREE research report to learn more.
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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-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.