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3 Unpopular Stocks with Open Questions
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. That said, here are three stocks where the outlook is warranted and some alternatives with better fundamentals.
Target (TGT)
Consensus Price Target: $161.62 (-1.1% implied return)
With a higher focus on style and aesthetics compared to other large general merchandise retailers, Target (NYSE:TGT) serves the suburban consumer who is looking for a wide range of products under one roof.
Why Are We Hesitant About TGT?
- Products fail to spark excitement with consumers, as seen in its flat sales over the last three years
- Poor same-store sales performance over the past two years indicates it’s having trouble bringing new shoppers into its brick-and-mortar locations
- Gross margin of 28.1% is below its competitors, leaving less money for marketing and promotions
Target’s stock price of $163.35 implies a valuation ratio of 17.9x forward P/E. To fully understand why you should be careful with TGT, check out our full research report (it’s free).
General Mills (GIS)
Consensus Price Target: $37.56 (-8.7% implied return)
Best known for its portfolio of powerhouse breakfast cereal brands, General Mills (NYSE:GIS) is a packaged foods company that has also made a mark in cereals, baking products, and snacks.
Why Is GIS Risky?
- Falling unit sales over the past two years indicate demand is soft and that the company may need to revise its product strategy
- Sales are expected to decline once again over the next 12 months as it continues working through a challenging demand environment
- Operating margin declined by 12.2 percentage points over the last year as its sales cratered
At $41.12 per share, General Mills trades at 13.2x forward P/E. Check out our free in-depth research report to learn more about why GIS doesn’t pass our bar.
Gilead Sciences (GILD)
Consensus Price Target: $157.41 (7.2% implied return)
From its groundbreaking work in developing the first single-tablet regimens for HIV treatment, Gilead Sciences (NASDAQ:GILD) develops and markets innovative medicines for life-threatening diseases including HIV, viral hepatitis, COVID-19, and cancer.
Why Does GILD Give Us Pause?
- Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 2.7% for the last five years
- Costs have risen faster than its revenue over the last five years, causing its adjusted operating margin to decline by 34.2 percentage points
- Earnings per share have dipped by 15.4% annually over the past five years, which is concerning because stock prices follow EPS over the long term
Gilead Sciences is trading at $146.88 per share, or 16.3x forward P/E. Dive into our free research report to see why there are better opportunities than GILD.
Stocks We Like More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum 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-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.