Wall Street has issued downbeat forecasts for the stocks in this article. These predictions are rare - financial institutions typically hesitate to say bad things about a company because it can jeopardize their other revenue-generating business lines like 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 three stocks where the outlook is warranted and some alternatives with better fundamentals.
ADT (ADT)
Consensus Price Target: $9.38 (8.1% implied return)
Founded in 1874 and headquartered in Boca Raton, Florida, ADT (NYSE: ADT) is a provider of security, automation, and smart home solutions, offering comprehensive services for home and business protection.
Why Does ADT Fall Short?
- Number of customers has disappointed over the past two years, indicating weak demand for its offerings
- Anticipated sales growth of 3.6% for the next year implies demand will be shaky
- Low returns on capital reflect management’s struggle to allocate funds effectively
ADT’s stock price of $8.68 implies a valuation ratio of 9.9x forward P/E. Read our free research report to see why you should think twice about including ADT in your portfolio.
Invesco (IVZ)
Consensus Price Target: $22.58 (9.2% implied return)
With roots dating back to 1935 when it pioneered the first mutual fund with an objective of capital growth, Invesco (NYSE: IVZ) is a global asset management firm that offers investment solutions across equities, fixed income, alternatives, and multi-asset strategies.
Why Do We Steer Clear of IVZ?
- Annual sales declines of 2.4% for the past five years show its products and services struggled to connect with the market during this cycle
- Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term
- ROE of 5.8% reflects management’s challenges in identifying attractive investment opportunities
Invesco is trading at $20.69 per share, or 10.7x forward P/E. Check out our free in-depth research report to learn more about why IVZ doesn’t pass our bar.
Allstate (ALL)
Consensus Price Target: $229.68 (10% implied return)
Born from a Sears, Roebuck & Co. initiative during the Great Depression with its famous "You're in good hands" slogan, Allstate (NYSE: ALL) is one of America's largest personal property and casualty insurers, offering protection for autos, homes, and personal property.
Why Does ALL Worry Us?
- Costs have risen faster than its revenue over the last four years, causing its combined ratio to worsen by 4.8 percentage points
- Book value per share stagnated over the last five years, limiting its ability to leverage its balance sheet to make additional investments
- Below-average return on equity indicates management struggled to find compelling investment opportunities
At $208.84 per share, Allstate trades at 2.4x forward P/B. Dive into our free research report to see why there are better opportunities than ALL.
Stocks We Like More
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out 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 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-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
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