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.
At StockStory, we look beyond the headlines with our independent analysis to determine whether these bearish calls are justified. That said, here are two stocks where you should be greedy instead of fearful and one where the skepticism is well-placed.
One Stock to Sell:
Air Lease (AL)
Consensus Price Target: $58.86 (0.5% implied return)
Established by a founder of Century City in Los Angeles, Air Lease Corporation (NYSE:AL) provides aircraft leasing and financing solutions to airlines worldwide.
Why Do We Think AL Will Underperform?
- Sales trends were unexciting over the last five years as its 6.4% annual growth was below the typical industrials company
- Free cash flow margin dropped by 50.5 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
Air Lease is trading at $58.54 per share, or 3.3x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why AL doesn’t pass our bar.
Two Stocks to Buy:
Howmet (HWM)
Consensus Price Target: $167.86 (-3% implied return)
Inventing the first forged aluminum truck wheel, Howmet (NYSE:HWM) specializes in lightweight metals engineering and manufacturing multi-material components used in vehicles.
Why Is HWM a Top Pick?
- Annual revenue growth of 12.7% over the last two years was superb and indicates its market share increased during this cycle
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 40.5% exceeded its revenue gains over the last two years
- Free cash flow margin jumped by 12.6 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
At $173.00 per share, Howmet trades at 51x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
Cintas (CTAS)
Consensus Price Target: $211.11 (-5.8% implied return)
Starting as a family business collecting and cleaning shop rags in Cincinnati, Cintas (NASDAQ:CTAS) provides corporate identity uniforms, facility services, and safety products to over one million businesses across North America.
Why Are We Backing CTAS?
- Solid 8.6% annual revenue growth over the last two years indicates its offering’s solve complex business issues
- Adjusted operating margin improvement of 4.9 percentage points over the last five years demonstrates its ability to scale efficiently
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its rising cash conversion increases its margin of safety
Cintas’s stock price of $224 implies a valuation ratio of 48.2x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our 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).
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.