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.
At StockStory, we look beyond the headlines with our independent analysis to determine whether these bearish calls are justified. Keeping that in mind, here are two stocks where you should be greedy instead of fearful and one where the outlook is warranted.
One IndustrialsStock to Sell:
MSC Industrial (MSM)
Consensus Price Target: $82.14 (2% implied return)
Founded in NYC’s Little Italy, MSC Industrial Direct (NYSE: MSM) provides industrial supplies and equipment, offering vast and reliable selection for customers such as contractors
Why Are We Out on MSM?
- 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
- Sales are projected to be flat over the next 12 months and imply weak demand
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 5.8% annually while its revenue grew
MSC Industrial’s stock price of $80.55 implies a valuation ratio of 20.9x forward P/E. Read our free research report to see why you should think twice about including MSM in your portfolio.
Two Industrials Stocks to Watch:
RBC Bearings (RBC)
Consensus Price Target: $402.50 (6.8% implied return)
With a Guinness World Record for engineering the largest spherical plain bearing, RBC Bearings (NYSE: RBC) is a manufacturer of bearings and related components for the aerospace & defense, industrial, and transportation industries.
Why Is RBC Interesting?
- Annual revenue growth of 17.6% over the past five years was outstanding, reflecting market share gains this cycle
- Excellent operating margin of 19.9% highlights the efficiency of its business model, and its rise over the last five years was fueled by some leverage on its fixed costs
- Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 20.5% annually
At $377 per share, RBC Bearings trades at 34.4x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Leonardo DRS (DRS)
Consensus Price Target: $43.75 (-2.8% implied return)
Developing submarine detection systems for the U.S. Navy, Leonardo DRS (NASDAQ: DRS) is a provider of defense systems, electronics, and military support services.
Why Should DRS Be on Your Watchlist?
- Sales pipeline is in good shape as its backlog averaged 54.4% growth over the past two years
- Additional sales over the last two years increased its profitability as the 17.5% annual growth in its earnings per share outpaced its revenue
- Free cash flow margin grew by 4.7 percentage points over the last five years, giving the company more chips to play with
Leonardo DRS is trading at $45.03 per share, or 41.3x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market 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 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free.
