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. That said, here are three stocks where the skepticism is well-placed and some better opportunities to consider.
Frontdoor (FTDR)
Consensus Price Target: $60.25 (-9.5% implied return)
Established in 2018 as a spin-off from ServiceMaster Global Holdings, Frontdoor (NASDAQ:FTDR) is a provider of home warranty and service plans.
Why Are We Hesitant About FTDR?
- Muted 6.8% annual revenue growth over the last five years shows its demand lagged behind its consumer discretionary peers
- Sluggish trends in its home service plans suggest customers aren’t adopting its solutions as quickly as the company hoped
- Estimated sales growth of 8.5% for the next 12 months is soft and implies weaker demand
At $66.54 per share, Frontdoor trades at 18.5x forward P/E. To fully understand why you should be careful with FTDR, check out our full research report (it’s free).
ANI Pharmaceuticals (ANIP)
Consensus Price Target: $99 (4.9% implied return)
With a diverse portfolio of 116 pharmaceutical products and a growing rare disease platform, ANI Pharmaceuticals (NASDAQ:ANIP) develops, manufactures, and markets branded and generic prescription pharmaceuticals, with a focus on rare disease treatments.
Why Does ANIP Fall Short?
- Smaller revenue base of $747.4 million means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
- Costs have risen faster than its revenue over the last five years, causing its adjusted operating margin to decline by 5.6 percentage points
- Push for growth has led to negative returns on capital, signaling value destruction
ANI Pharmaceuticals’s stock price of $94.34 implies a valuation ratio of 14.8x forward P/E. If you’re considering ANIP for your portfolio, see our FREE research report to learn more.
S&T Bancorp (STBA)
Consensus Price Target: $41 (6.8% implied return)
Tracing its roots back to 1902 in western Pennsylvania's industrial heartland, S&T Bancorp (NASDAQ:STBA) is a Pennsylvania-based bank holding company that provides retail and commercial banking services, cash management, trust services, and investment advisory solutions.
Why Do We Think Twice About STBA?
- Annual net interest income growth of 3.9% over the last five years was below our standards for the banking sector
- Anticipated net interest income growth of 5.1% for the next year implies demand will be shaky
- Net interest margin dropped by 35.7 basis points (100 basis points = 1 percentage point) over the last two years, implying the firm’s loan book profitability fell as competitors entered the market
S&T Bancorp is trading at $38.38 per share, or 1x forward P/B. Dive into our free research report to see why there are better opportunities than STBA.
High-Quality Stocks for All Market Conditions
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 6 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).
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