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. That said, 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:
American Financial Group (AFG)
Consensus Price Target: $140.50 (7.2% implied return)
With roots dating back to 1872 and a business model that empowers local decision-making, American Financial Group (NYSE: AFG) is an insurance holding company that specializes in commercial property and casualty insurance products for businesses through its Great American Insurance Group.
Why Does AFG Fall Short?
- Net premiums earned expanded by 3.9% annually over the last two years, falling below our expectations for the insurance sector
- Performance over the past two years shows its incremental sales were much less profitable, as its earnings per share fell by 1.3% annually
- Annual book value per share declines of 6% for the past five years show its capital management struggled during this cycle
American Financial Group is trading at $131.12 per share, or 2.1x forward P/B. Check out our free in-depth research report to learn more about why AFG doesn’t pass our bar.
Eastern Bank (EBC)
Consensus Price Target: $23.42 (8.4% implied return)
Founded in 1818 as one of America's oldest mutual banks before converting to a public company in 2020, Eastern Bankshares (NASDAQ: EBC) operates as a bank holding company providing commercial and retail banking services primarily in Massachusetts, New Hampshire, and Rhode Island.
Why Are We Hesitant About EBC?
- Inferior net interest margin of 3.2% means it must compensate for lower profitability through increased loan originations
- Products and services are facing significant credit quality challenges during this cycle as tangible book value per share has declined by 4.5% annually over the last five years
- Estimated tangible book value per share for the next 12 months is flat and implies a softer backdrop
At $21.60 per share, Eastern Bank trades at 1.1x forward P/B. To fully understand why you should be careful with EBC, check out our full research report (it’s free).
One Stock to Buy:
Nextpower (NXT)
Consensus Price Target: $121.74 (-1.6% implied return)
With its technology playing a key role in the massive 1.2 gigawatt Noor Abu Dhabi solar farm project, Nextpower (NASDAQ: NXT) is a provider of solar tracker systems that help solar panels follow the sun.
Why Is NXT a Good Business?
- Impressive 25.7% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Free cash flow margin jumped by 22.5 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
- Returns on capital are growing as management capitalizes on its market opportunities
Nextpower’s stock price of $123.72 implies a valuation ratio of 26.1x 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
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
