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.
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 are two stocks where Wall Street’s pessimism is creating a buying opportunity and one where the outlook is warranted.
One Stock to Sell:
Ellington Financial (EFC)
Consensus Price Target: $14.63 (4.8% implied return)
Operating under the guidance of Ellington Management Group, a respected name in structured credit markets, Ellington Financial (NYSE:EFC) acquires and manages a diverse portfolio of mortgage-related, consumer-related, and other financial assets to generate returns for investors.
Why Are We Out on EFC?
- Annual earnings per share growth of 1.6% underperformed its revenue over the last five years, showing its incremental sales were less profitable
- Annual tangible book value per share declines of 4% for the past five years show its capital management struggled during this cycle
Ellington Financial is trading at $13.96 per share, or 1x forward P/B. Dive into our free research report to see why there are better opportunities than EFC.
Two Stocks to Watch:
Ross Stores (ROST)
Consensus Price Target: $166.24 (2.2% implied return)
Selling excess inventory or overstocked items from other retailers, Ross Stores (NASDAQ:ROST) is an off-price concept that sells apparel and other goods at prices much lower than department stores.
Why Are We Positive On ROST?
- Rapid rollout of new stores to capitalize on market opportunities makes sense given its strong same-store sales performance
- Locations open for at least a year are seeing increased demand as same-store sales have averaged 3.1% growth over the past two years
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures
At $162.73 per share, Ross Stores trades at 24.6x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
TriCo Bancshares (TCBK)
Consensus Price Target: $49.33 (8.4% implied return)
Founded in 1975 and headquartered in Chico, California, TriCo Bancshares (NASDAQ:TCBK) operates Tri Counties Bank, providing personal, small business, and commercial banking services through branches across California.
Why Could TCBK Be a Winner?
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 11% over the last five years outstripped its revenue performance
- Impressive 16.2% annual tangible book value per share growth over the last two years indicates it’s building equity value this cycle
- ROE punches in at 10.9%, illustrating management’s expertise in identifying profitable investments
TriCo Bancshares’s stock price of $45.49 implies a valuation ratio of 1.1x forward P/B. Is now a good time to buy? See for yourself in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
Trump’s April 2025 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 Strong Momentum Stocks for this week. 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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