Yahoo Finance

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. That said, here is one stock where you should be greedy instead of fearful and two where the skepticism is well-placed.

Two Stocks to Sell:

Mondelez (MDLZ)

Consensus Price Target: $72.71 (8.9% implied return)

Founded as Nabisco in 1903, Mondelez (NASDAQ:MDLZ) is a packaged snacks powerhouse best known for its Oreo, Cadbury, Toblerone, Ritz, and Trident brands.

Why Does MDLZ Fall Short?

1. Costs have risen faster than its revenue over the last year, causing its operating margin to decline by 7 percentage points

2. Capital intensity has ramped up over the last year as its free cash flow margin decreased by 1.3 percentage points

3. Underwhelming 8% return on capital reflects management’s difficulties in finding profitable growth opportunities

Mondelez’s stock price of $66.75 implies a valuation ratio of 22x forward P/E. Dive into our free research report to see why there are better opportunities than MDLZ.

Jabil (JBL)

Consensus Price Target: $164.76 (7% implied return)

With manufacturing facilities spanning the globe from China to Mexico to the United States, Jabil (NYSE:JBL) provides electronics design, manufacturing, and supply chain solutions to companies across various industries, from healthcare to automotive to cloud computing.

Why Does JBL Give Us Pause?

1. Sales tumbled by 11.6% annually over the last two years, showing market trends are working against its favor during this cycle

2. Flat earnings per share over the last two years lagged its peers

3. Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 3.1% for the last five years

Jabil is trading at $153.98 per share, or 16.1x forward P/E. If you’re considering JBL for your portfolio, see our FREE research report to learn more.

One Stock to Buy:

Monster (MNST)

Consensus Price Target: $60.37 (-0.8% implied return)

Founded in 2002 as a natural soda and juice company, Monster Beverage (NASDAQ:MNST) is a pioneer of the energy drink category, and its Monster Energy brand targets a young, active demographic.

Why Should You Buy MNST?

1. Disciplined cost controls and effective management resulted in a strong two-year operating margin of 27.3%

2. Strong free cash flow margin of 22% enables it to reinvest or return capital consistently, and its growing cash flow gives it even more resources to deploy

3. Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures