When Wall Street turns bearish on a stock, it’s worth paying attention. These calls stand out because analysts rarely issue grim ratings on companies for fear their firms will lose out in other business lines such as 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:
Flowserve (FLS)
Consensus Price Target: $93.80 (4.1% implied return)
Manufacturing the largest pump ever built for nuclear power generation, Flowserve (NYSE:FLS) manufactures and sells flow control equipment for various industries.
Why Are We Cautious About FLS?
- New orders were hard to come by as its average backlog growth of 6% over the past two years underwhelmed
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 5.9%
- Low free cash flow margin of 5.4% for the last five years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
Flowserve is trading at $90.10 per share, or 21.1x forward P/E. To fully understand why you should be careful with FLS, check out our full research report (it’s free).
First Busey (BUSE)
Consensus Price Target: $28 (5% implied return)
Tracing its roots back to 1868 during America's post-Civil War reconstruction era, First Busey (NASDAQ:BUSE) is a bank holding company that provides commercial and retail banking, wealth management, and payment technology solutions across Illinois, Missouri, Florida, and Indiana.
Why Does BUSE Fall Short?
- Weak unit economics are reflected in its net interest margin of 3.3%, one of the worst among bank companies
- Annual earnings per share growth of 4.9% underperformed its revenue over the last five years, showing its incremental sales were less profitable
- Projected tangible book value per share decline of 3.2% for the next 12 months points to tough credit quality challenges ahead
First Busey’s stock price of $26.66 implies a valuation ratio of 1x forward P/B. If you’re considering BUSE for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
First BanCorp (FBP)
Consensus Price Target: $24.64 (9.9% implied return)
Tracing its roots back to 1948 in San Juan, First BanCorp (NYSE:FBP) is a bank holding company that provides commercial banking, consumer financing, mortgage services, and insurance products across Puerto Rico, the U.S. mainland, and the Caribbean.
Why Do We Like FBP?
- Differentiated product suite results in a Strong performance of its loan book results in a High-yielding loan book and low cost of funds result in a best-in-class net interest margin of 4.6%
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 37.3% exceeded its revenue gains over the last five years
- Balance sheet strength has increased this cycle as its 20.1% annual tangible book value per share growth over the last two years was exceptional
At $22.43 per share, First BanCorp trades at 1.6x forward P/B. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even 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 5 Strong Momentum 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.