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.
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 are three stocks where the outlook is warranted and some alternatives with better fundamentals.
La-Z-Boy (LZB)
Consensus Price Target: $42.50 (6.7% implied return)
The prized possession of every mancave, La-Z-Boy (NYSE: LZB) is a furniture company specializing in recliners, sofas, and seats.
Why Do We Think LZB Will Underperform?
- Lackluster 5.8% annual revenue growth over the last five years indicates the company is losing ground to competitors
- Free cash flow margin is projected to show no improvement next year
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
La-Z-Boy is trading at $39.82 per share, or 14x forward P/E. To fully understand why you should be careful with LZB, check out our full research report (it’s free for active Edge members).
REV Group (REVG)
Consensus Price Target: $62.80 (7.5% implied return)
Offering the first full-electric North American fire truck, REV (NYSE: REVG) manufactures and sells specialty vehicles.
Why Are We Wary of REVG?
- Average backlog growth of 3.7% over the past two years was mediocre and suggests fewer customers signed long-term contracts
- Gross margin of 12.5% is below its competitors, leaving less money to invest in areas like marketing and R&D
- Poor expense management has led to an operating margin of 3.9% that is below the industry average
REV Group’s stock price of $58.44 implies a valuation ratio of 16.3x forward P/E. Dive into our free research report to see why there are better opportunities than REVG.
Citizens Financial Group (CFG)
Consensus Price Target: $62.23 (7.1% implied return)
Tracing its roots back to 1828 as a community-focused institution, Citizens Financial Group (NYSE: CFG) is a regional bank that provides retail and commercial banking services to individuals, small businesses, and large corporations across 14 states.
Why Do We Pass on CFG?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 2.2% annually over the last two years
- Net interest income trends were unexciting over the last five years as its 4.5% annual growth was below the typical banking firm
- Performance over the past five years shows its incremental sales were less profitable, as its 2.3% annual earnings per share growth trailed its revenue gains
At $58.08 per share, Citizens Financial Group trades at 1x forward P/B. Read our free research report to see why you should think twice about including CFG in your portfolio.
Stocks We Like More
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 6 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
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
