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 where you should be greedy instead of fearful and two where the skepticism is well-placed.
Two Stocks to Sell:
Marcus & Millichap (MMI)
Consensus Price Target: $30 (-0.1% implied return)
Founded in 1971, Marcus & Millichap (NYSE:MMI) specializes in commercial real estate investment sales, financing, research, and advisory services.
Why Do We Think MMI Will Underperform?
- Products and services aren't resonating with the market as its revenue declined by 3.2% annually over the last five years
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
- Diminishing returns on capital suggest its earlier profit pools are drying up
Marcus & Millichap is trading at $30.03 per share, or 300.5x forward P/E. If you’re considering MMI for your portfolio, see our FREE research report to learn more.
Illinois Tool Works (ITW)
Consensus Price Target: $246.53 (-0.9% implied return)
Founded by Byron Smith, an investor who held over 100 patents, Illinois Tool Works (NYSE:ITW) manufactures engineered components and specialized equipment for numerous industries.
Why Is ITW Not Exciting?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Anticipated sales growth of 1.4% for the next year implies demand will be shaky
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 1.8 percentage points
Illinois Tool Works’s stock price of $248.75 implies a valuation ratio of 23.9x forward P/E. Check out our free in-depth research report to learn more about why ITW doesn’t pass our bar.
One Stock to Watch:
CACI (CACI)
Consensus Price Target: $498.02 (7.8% implied return)
Founded to commercialize SIMSCRIPT, CACI International (NYSE:CACI) offers defense, intelligence, and IT solutions to support national security and government transformation efforts.
Why Does CACI Stand Out?
- Demand is greater than supply as the company’s 13% average backlog growth over the past two years shows it’s securing new contracts and accumulating more orders than it can fulfill
- Sales outlook for the upcoming 12 months implies the business will stay on its desirable two-year growth trajectory
- Share buybacks catapulted its annual earnings per share growth to 16.9%, which outperformed its revenue gains over the last two years
At $462.04 per share, CACI trades at 17.4x 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
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years.
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.