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 you should be greedy instead of fearful and two where the skepticism is well-placed.
Two Industrials Stocks to Sell:
Simpson (SSD)
Consensus Price Target: $190 (5.2% implied return)
Aiming to build safer and stronger buildings, Simpson (NYSE:SSD) designs and manufactures structural connectors, anchors, and other construction products.
Why Does SSD Fall Short?
- 2.6% annual revenue growth over the last two years was slower than its industrials peers
- Free cash flow margin shrank by 10.7 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- Eroding returns on capital suggest its historical profit centers are aging
Simpson’s stock price of $180.64 implies a valuation ratio of 21.3x forward P/E. Read our free research report to see why you should think twice about including SSD in your portfolio.
Johnson Controls (JCI)
Consensus Price Target: $112.30 (5.5% implied return)
Founded after patenting the electric room thermostat, Johnson Controls (NYSE:JCI) specializes in building products and technology solutions, including HVAC systems, fire and security systems, and energy storage.
Why Does JCI Worry Us?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 5% annually
- Below-average returns on capital indicate management struggled to find compelling investment opportunities, and its falling returns suggest its earlier profit pools are drying up
Johnson Controls is trading at $106.48 per share, or 25.4x forward P/E. If you’re considering JCI for your portfolio, see our FREE research report to learn more.
One Industrials Stock to Buy:
Chart (GTLS)
Consensus Price Target: $205.83 (3.6% implied return)
Installing the first bulk Co2 tank for McDonalds’s sodas, Chart (NYSE:GTLS) provides equipment to store and transport gasses.
Why Will GTLS Outperform?
- Backlog has averaged 31.9% growth over the past two years, showing it has a pipeline of unfulfilled orders that will support revenue in the future
- Earnings per share have massively outperformed its peers over the last two years, increasing by 28% annually
- Free cash flow margin grew by 9.6 percentage points over the last five years, giving the company more chips to play with
At $198.75 per share, Chart trades at 14.6x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
When Trump unveiled his aggressive tariff plan in April 2024, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at 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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