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.

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. That said, here is one stock poised to prove Wall Street wrong and two facing legitimate challenges.

Two Stocks to Sell:

Vestis (VSTS)

Consensus Price Target: $6.44 (2.2% implied return)

Operating a network of more than 350 facilities with 3,300 delivery routes serving customers weekly, Vestis (NYSE:VSTS) provides uniform rentals, workplace supplies, and facility services to over 300,000 business locations across the United States and Canada.

Why Do We Steer Clear of VSTS?

1. Sales were flat over the last two years, indicating it’s failed to expand this cycle

2. Falling earnings per share over the last three years has some investors worried as stock prices ultimately follow EPS over the long term

3. Capital intensity has ramped up over the last four years as its free cash flow margin decreased by 6 percentage points

Vestis is trading at $6.30 per share, or 8.1x forward P/E. To fully understand why you should be careful with VSTS, check out our full research report (it’s free).

Johnson Controls (JCI)

Consensus Price Target: $102.73 (-0.8% implied return)

Founded after patenting the electric room thermostat, Johnson Controls (NYSE:JCI) specializes in building products and technology solutions, including HVAC systems, fire and security systems, and energy storage.

Why Do We Avoid JCI?

1. 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

2. Anticipated sales growth of 4% for the next year implies demand will be shaky

3. Low returns on capital reflect management’s struggle to allocate funds effectively

At $103.55 per share, Johnson Controls trades at 26.9x forward P/E. Dive into our free research report to see why there are better opportunities than JCI.

One Stock to Watch:

Snowflake (SNOW)

Consensus Price Target: $227.04 (7.7% implied return)

Founded in 2013 by three French engineers who spent decades working for Oracle, Snowflake (NYSE:SNOW) provides a data warehouse-as-a-service in the cloud that allows companies to store large amounts of data and analyze it in real time.