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. That said, here are two stocks where you should be greedy instead of fearful and one where the outlook is warranted.
One Stock to Sell:
Cracker Barrel (CBRL)
Consensus Price Target: $55.14 (-1.2% implied return)
Known for its country-themed food and merchandise, Cracker Barrel (NASDAQ:CBRL) is a beloved American restaurant and retail chain that celebrates the warmth and charm of Southern hospitality.
Why Do We Pass on CBRL?
- Disappointing same-store sales over the past two years show customers aren’t responding well to its menu offerings and dining experience
- Demand will likely fall over the next 12 months as Wall Street expects flat revenue
- 5× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings
At $55.80 per share, Cracker Barrel trades at 19.8x forward P/E. To fully understand why you should be careful with CBRL, check out our full research report (it’s free).
Two Stocks to Watch:
Applied Materials (AMAT)
Consensus Price Target: $204.16 (14.4% implied return)
Founded in 1967 as the first company to develop tools for other businesses in the semiconductor industry, Applied Materials (NASDAQ:AMAT) is the largest provider of semiconductor wafer fabrication equipment.
Why Are We Fans of AMAT?
- Impressive 12.7% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Highly efficient business model is illustrated by its impressive 29.3% operating margin, and it turbocharged its profits by achieving some fixed cost leverage
- Stellar returns on capital showcase management’s ability to surface highly profitable business ventures
Applied Materials’s stock price of $178.39 implies a valuation ratio of 19x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Broadcom (AVGO)
Consensus Price Target: $295.16 (0.9% implied return)
Originally the semiconductor division of Hewlett Packard, Broadcom (NASDAQ:AVGO) is a semiconductor conglomerate spanning wireless communications, networking, and data storage as well as infrastructure software focused on mainframes and cybersecurity.
Why Will AVGO Beat the Market?
- Annual revenue growth of 27.6% over the past two years was outstanding, reflecting market share gains this cycle
- Superior product capabilities and pricing power are reflected in its best-in-class gross margin of 75.8%
- Robust free cash flow margin of 41.3% gives it many options for capital deployment
Broadcom is trading at $292.63 per share, or 40.4x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Trump’s April 2024 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 5 Growth Stocks for this month. 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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