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 three stocks facing legitimate challenges and some alternatives worth exploring instead.
Ralph Lauren (RL)
Consensus Price Target: $345.74 (12.8% implied return)
Originally founded as a necktie company, Ralph Lauren (NYSE:RL) is an iconic American fashion brand known for its classic and sophisticated style.
Why Does RL Fall Short?
- Constant currency revenue growth has disappointed over the past two years and shows demand was soft
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 5.4%
- Capital intensity will likely increase as its free cash flow margin is anticipated to drop by 1.5 percentage points over the next year
At $306.50 per share, Ralph Lauren trades at 21.5x forward P/E. Dive into our free research report to see why there are better opportunities than RL.
Teledyne (TDY)
Consensus Price Target: $608.40 (10.4% implied return)
Playing a role in mapping the ocean floor as we know it today, Teledyne (NYSE:TDY) offers digital imaging and instrumentation products for various industries.
Why Does TDY Give Us Pause?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- 2.5 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
- Underwhelming 6.7% return on capital reflects management’s difficulties in finding profitable growth opportunities
Teledyne’s stock price of $550.87 implies a valuation ratio of 24.4x forward P/E. Read our free research report to see why you should think twice about including TDY in your portfolio.
Kimball Electronics (KE)
Consensus Price Target: $27.88 (-11% implied return)
Founded in 1961, Kimball Electronics (NYSE:KE) is a global contract manufacturer specializing in electronics and manufacturing solutions for automotive, medical, and industrial markets.
Why Should You Dump KE?
- Sales tumbled by 9.7% annually over the last two years, showing market trends are working against its favor during this cycle
- Competitive supply chain dynamics and steep production costs are reflected in its low gross margin of 8.1%
- Earnings per share have contracted by 29.1% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
Kimball Electronics is trading at $31.32 per share, or 31.1x forward P/E. Check out our free in-depth research report to learn more about why KE doesn’t pass our bar.
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 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).
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