1 Unpopular Stock That Deserves a Second Chance and 2 Facing Headwinds
Wall Street’s bearish price targets for the stocks in this article signal serious concerns. Such forecasts are uncommon in an industry where maintaining cordial corporate relationships often trumps delivering the hard truth.
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 is one stock poised to prove Wall Street wrong and two where the outlook is warranted.
Two Stocks to Sell:
Sally Beauty (SBH)
Consensus Price Target: $16.25 (14% implied return)
Catering to both everyday consumers as well as salon professionals, Sally Beauty (NYSE:SBH) is a retailer that sells salon-quality beauty products such as makeup and haircare products.
Why Do We Steer Clear of SBH?
- Lack of new stores suggest it’s attempting to increase revenue at existing locations because demand is sluggish
- Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and store experience
- Revenue base of $3.70 billion puts it at a disadvantage compared to larger competitors exhibiting economies of scale
Sally Beauty is trading at $14.26 per share, or 7x forward P/E. Dive into our free research report to see why there are better opportunities than SBH.
Arrow Electronics (ARW)
Consensus Price Target: $108.25 (-1.8% implied return)
Founded as a single retail store, Arrow Electronics (NYSE:ARW) provides electronic components and enterprise computing solutions to businesses globally.
Why Do We Avoid ARW?
- Annual sales declines of 7.8% for the past two years show its products and services struggled to connect with the market during this cycle
- Sales were less profitable over the last two years as its earnings per share fell by 28.5% annually, worse than its revenue declines
- Diminishing returns on capital suggest its earlier profit pools are drying up
Arrow Electronics’s stock price of $110.18 implies a valuation ratio of 10x forward P/E. Read our free research report to see why you should think twice about including ARW in your portfolio.
One Stock to Watch:
Parker-Hannifin (PH)
Consensus Price Target: $924.91 (5.1% implied return)
Founded in 1917, Parker Hannifin (NYSE:PH) is a manufacturer of motion and control systems for a wide variety of mobile, industrial and aerospace markets.
Why Does PH Catch Our Eye?
- Excellent operating margin of 18.2% highlights the efficiency of its business model, and it turbocharged its profits by achieving some fixed cost leverage
- Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- PH is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its improved cash conversion implies it’s becoming a less capital-intensive business
At $879.70 per share, Parker-Hannifin trades at 28.8x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in 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 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today.