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 facing legitimate challenges.

Two Stocks to Sell:

Somnigroup (SGI)

Consensus Price Target: $102.29 (8.8% implied return)

Established through the merger of Tempur-Pedic and Sealy in 2012, Somnigroup (NYSE: SGI) is a bedding manufacturer known for its innovative memory foam mattresses and sleep products

Why Do We Think SGI Will Underperform?

1. 14.3% annual revenue growth over the last five years was slower than its consumer discretionary peers
2. Capital intensity will likely ramp up in the next year as its free cash flow margin is expected to contract by 1 percentage points
3. Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions

Somnigroup’s stock price of $94.04 implies a valuation ratio of 29.2x forward P/E. Check out our free in-depth research report to learn more about why SGI doesn’t pass our bar.

Crane (CR)

Consensus Price Target: $215.60 (2.5% implied return)

Based in Connecticut, Crane (NYSE: CR) is a diversified manufacturer of engineered industrial products, including fluid handling, and aerospace technologies.

Why Does CR Fall Short?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 5.2% annually over the last five years
2. Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
3. Performance over the past two years was negatively impacted by new share issuances as its earnings per share grew slower than its revenue

Crane is trading at $210.28 per share, or 33.4x forward P/E. Read our free research report to see why you should think twice about including CR in your portfolio.

One Stock to Buy:

Micron (MU)

Consensus Price Target: $350.36 (-11.3% implied return)

Founded in the basement of a Boise, Idaho dental office in 1978, Micron (NYSE: MU) is a leading provider of memory chips used in thousands of devices across mobile, data centers, industrial, consumer, and automotive markets.

Why Are We Bullish on MU?

1. Annual revenue growth of 61.7% over the last two years was superb and indicates its market share increased during this cycle
2. Projected revenue growth of 103% for the next 12 months is above its two-year trend, pointing to accelerating demand
3. Earnings growth has massively outpaced its peers over the last five years as its EPS has compounded at 29.2% annually

At $395.02 per share, Micron trades at 9.4x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

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