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.
At StockStory, we look beyond the headlines with our independent analysis to determine whether these bearish calls are justified. 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:
Packaging Corporation of America (PKG)
Consensus Price Target: $246.20 (10.9% implied return)
Founded in 1959, Packaging Corporation of America (NYSE: PKG) produces containerboard and corrugated packaging products as well as displays and package protection.
Why Are We Hesitant About PKG?
- Weak unit sales over the past two years imply it may need to invest in improvements to get back on track
- Day-to-day expenses have swelled relative to revenue over the last five years as its operating margin fell by 6.7 percentage points
- Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
Packaging Corporation of America’s stock price of $222 implies a valuation ratio of 19.8x forward P/E. Read our free research report to see why you should think twice about including PKG in your portfolio.
City Holding (CHCO)
Consensus Price Target: $132 (-4.7% implied return)
With roots dating back to 1957 and a strategic presence along the I-64 and I-81 corridors, City Holding (NASDAQGS:CHCO) operates as a financial holding company providing banking, trust, and investment services through its subsidiary City National Bank across West Virginia, Kentucky, Virginia, and Ohio.
Why Does CHCO Fall Short?
- Annual net interest income growth of 9.8% over the last five years was below our standards for the banking sector
- Estimated net interest income growth of 3% for the next 12 months implies demand will slow from its five-year trend
- Estimated tangible book value per share growth of 8.6% for the next 12 months implies profitability will slow from its two-year trend
At $138.56 per share, City Holding trades at 2.3x forward P/B. To fully understand why you should be careful with CHCO, check out our full research report (it’s free).
One Stock to Watch:
Altria (MO)
Consensus Price Target: $70.64 (-2.7% implied return)
Best known for its Marlboro brand of cigarettes, Altria (NYSE: MO) offers tobacco and nicotine products.
Why Does MO Stand Out?
- Differentiated product offerings are difficult to replicate at scale and result in a best-in-class gross margin of 87.7%
- Healthy operating margin of 52.7% shows it’s a well-run company with efficient processes, and its profitability increased over the last year as it eliminated unnecessary expenses
- MO is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
Altria is trading at $72.58 per share, or 12.7x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
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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-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.
