In This Article:
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.
Whatever the consensus opinion may be, our team at StockStory cuts through the noise by conducting independent analysis to determine a company’s long-term prospects. That said, here is one stock poised to prove Wall Street wrong and two where the outlook is warranted.
Two Stocks to Sell:
Otis (OTIS)
Consensus Price Target: $100.57 (3.2% implied return)
Credited with inventing the first hydraulic passenger elevator, Otis Worldwide (NYSE:OTIS) is an elevator and escalator manufacturing, installation and service company.
Why Does OTIS Give Us Pause?
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Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
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Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 3.9%
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Free cash flow margin shrank by 2.8 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
Otis is trading at $97.41 per share, or 23.3x forward P/E. If you’re considering OTIS for your portfolio, see our FREE research report to learn more.
U.S. Cellular (USM)
Consensus Price Target: $74.06 (27% implied return)
Operating as a majority-owned subsidiary of Telephone and Data Systems since its founding in 1983, US Cellular (NYSE:USM) is a regional wireless telecommunications provider serving 4.6 million customers across 21 states with mobile phone, internet, and IoT services.
Why Should You Dump USM?
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Products and services are facing significant end-market challenges during this cycle as sales have declined by 1.6% annually over the last five years
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Overall productivity fell over the last five years as its plummeting sales were accompanied by a decline in its adjusted operating margin
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Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term
U.S. Cellular’s stock price of $58.33 implies a valuation ratio of 5.2x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than USM.
One Stock to Watch:
Cigna (CI)
Consensus Price Target: $369.67 (11% implied return)
With roots dating back to 1792 and serving millions of customers across the globe, The Cigna Group (NYSE:CI) provides healthcare services through its Evernorth Health Services and Cigna Healthcare segments, offering pharmacy benefits, specialty care, and medical plans.