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.
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. Keeping that in mind, here is one stock where Wall Street’s pessimism is creating a buying opportunity and two where the outlook is warranted.
Two Stocks to Sell:
Thermon (THR)
Consensus Price Target: $34.50 (-2.8% implied return)
Creating the first packaged tracing systems, Thermon (NYSE:THR) is a leading provider of engineered industrial process heating solutions for process industries.
Why Are We Cautious About THR?
- Sales trends were unexciting over the last two years as its 3.5% annual growth was below the typical industrials company
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 3.1%
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 5.6% annually
Thermon’s stock price of $35.51 implies a valuation ratio of 18.7x forward EV-to-EBITDA. If you’re considering THR for your portfolio, see our FREE research report to learn more.
Cathay General Bancorp (CATY)
Consensus Price Target: $51.20 (10.1% implied return)
Founded in 1962 with its first branch in Los Angeles' Chinatown, Cathay General Bancorp (NASDAQ:CATY) operates Cathay Bank, providing commercial banking services to businesses and individuals with a strong presence in Asian-American communities.
Why Is CATY Not Exciting?
- Sales tumbled by 1.8% annually over the last two years, showing market trends are working against its favor during this cycle
- Net interest income trends were unexciting over the last five years as its 5.4% annual growth was below the typical banking firm
- Net interest margin shrank by 24.3 basis points (100 basis points = 1 percentage point) over the last two years, suggesting the profitability of its loan book is decreasing or the market is becoming more competitive
At $46.52 per share, Cathay General Bancorp trades at 1.1x forward P/B. To fully understand why you should be careful with CATY, check out our full research report (it’s free for active Edge members).
One Stock to Buy:
Eli Lilly (LLY)
Consensus Price Target: $973.85 (-4.6% implied return)
Founded in 1876 by a Civil War veteran and pharmacist frustrated with the poor quality of medicines, Eli Lilly (NYSE:LLY) discovers, develops, and manufactures pharmaceutical products for conditions including diabetes, obesity, cancer, immunological disorders, and neurological diseases.
Why Do We Love LLY?
- Impressive 36.1% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Adjusted operating margin improvement of 20.8 percentage points over the last two years demonstrates its ability to scale efficiently
- Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
Eli Lilly is trading at $1,020 per share, or 32.9x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free for active Edge members .
High-Quality Stocks for All Market Conditions
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 9 Market-Beating Stocks. 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 (+1,545% 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. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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