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.
Accurately determining a company’s long-term prospects isn’t easy, especially when sentiment is weak. That’s where StockStory comes in - to help you find attractive investment candidates backed by unbiased research. Keeping that in mind, here are two stocks where Wall Street’s pessimism is creating a buying opportunity and one where the outlook is warranted.
One Stock to Sell:
Credit Acceptance (CACC)
Consensus Price Target: $451.67 (-9.3% implied return)
Founded in 1972 by Donald Foss to serve customers overlooked by traditional lenders, Credit Acceptance (NASDAQ: CACC) provides auto financing solutions that enable car dealers to sell vehicles to consumers with limited or impaired credit histories.
Why Do We Pass on CACC?
- Annual revenue growth of 2.8% over the last five years was below our standards for the financials sector
- Incremental sales over the last two years were much less profitable as its earnings per share fell by 2% annually while its revenue grew
Credit Acceptance is trading at $498.10 per share, or 11.5x forward P/E. Dive into our free research report to see why there are better opportunities than CACC.
Two Stocks to Watch:
Blue Bird (BLBD)
Consensus Price Target: $69.29 (9.1% implied return)
With around a century of experience, Blue Bird (NASDAQ: BLBD) is a manufacturer of school buses and complementary parts.
Why Will BLBD Beat the Market?
- Annual revenue growth of 11.9% over the last five years was superb and indicates its market share increased during this cycle
- Free cash flow margin increased by 23.5 percentage points over the last five years, giving the company more capital to invest or return to shareholders
- Returns on capital are growing as management capitalizes on its market opportunities
At $63.50 per share, Blue Bird trades at 14.3x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
Old Second Bancorp (OSBC)
Consensus Price Target: $23.60 (8.9% implied return)
Dating back to 1871 as one of the Chicago area's longest-standing financial institutions, Old Second Bancorp (NASDAQ: OSBC) is an Illinois-based community bank offering deposit services, commercial and consumer loans, wealth management, and mortgage products through its 53 branch locations.
Why Are We Positive On OSBC?
- Annual net interest income growth of 26.1% over the last five years was superb and indicates its market share increased during this cycle
- Estimated net interest income growth of 13.2% for the next 12 months implies its momentum over the last five years will continue
- Differentiated product suite results in a Strong performance of its loan book leads to a High-yielding loan book and low cost of funds result in a best-in-class net interest margin of 4.8%
Old Second Bancorp’s stock price of $21.68 implies a valuation ratio of 1.1x forward P/B. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don't just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
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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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
