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 Wall Street’s pessimism is creating a buying opportunity and two where the outlook is warranted.
Two Stocks to Sell:
Sabre (SABR)
Consensus Price Target: $2.13 (-1.6% implied return)
Originally a division of American Airlines, Sabre (NASDAQ:SABR) is a technology provider for the global travel and tourism industry.
Why Are We Out on SABR?
- Demand for its offerings was relatively low as its number of total bookings has underwhelmed
- Negative free cash flow raises questions about the return timeline for its investments
- 7× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings
At $2.16 per share, Sabre trades at 6.9x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than SABR.
Capital Southwest (CSWC)
Consensus Price Target: $25.30 (4.4% implied return)
Originally founded in 1961 as a venture capital investor that helped launch Texas Instruments, Capital Southwest (NASDAQ:CSWC) is a business development company that provides debt and equity financing to middle-market companies primarily in the United States.
Why Do We Steer Clear of CSWC?
- Performance over the past two years shows its incremental sales were much less profitable, as its earnings per share fell by 6.2% annually
- Below-average return on equity indicates management struggled to find compelling investment opportunities
- High net-debt-to-EBITDA ratio of 8× could force the company to raise capital on unfavorable terms if market conditions deteriorate
Capital Southwest is trading at $24.23 per share, or 10.6x forward P/E. Read our free research report to see why you should think twice about including CSWC in your portfolio.
One Stock to Watch:
1st Source (SRCE)
Consensus Price Target: $89.67 (2.9% implied return)
Tracing its roots back to 1863 during the Civil War era, 1st Source Corporation (NASDAQ:SRCE) is a regional bank holding company that provides commercial, consumer, specialty finance, and wealth management services across Indiana, Michigan, and Florida.
Why Could SRCE Be a Winner?
- Net interest margin grew by 68.5 basis points (100 basis points = 1 percentage point) over the last two years, giving the firm more chips to play with
- Performance over the past two years was boosted by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Balance sheet strength has increased this cycle as its 9.3% annual tangible book value per share growth over the last five years was exceptional
1st Source’s stock price of $87.16 implies a valuation ratio of 1.5x forward P/B. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.