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.
At StockStory, we look beyond the headlines with our independent analysis to determine whether these bearish calls are justified. That said, here are three stocks where the outlook is warranted and some alternatives with better fundamentals.
AMC Networks (AMCX)
Consensus Price Target: $6.50 (5.7% implied return)
Originally the joint-venture of four cable television companies, AMC Networks (NASDAQ:AMCX) is a broadcaster producing a diverse range of television shows and movies.
Why Are We Out on AMCX?
- Products and services aren't resonating with the market as its revenue declined by 4.6% annually over the last five years
- Earnings per share decreased by more than its revenue over the last five years, showing each sale was less profitable
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
At $6.15 per share, AMC Networks trades at 2.1x forward P/E. Check out our free in-depth research report to learn more about why AMCX doesn’t pass our bar.
Incyte (INCY)
Consensus Price Target: $75.15 (5.1% implied return)
Founded in 1991 and evolving from a genomics research firm to a commercial-stage drug developer, Incyte (NASDAQ:INCY) is a biopharmaceutical company that discovers, develops, and commercializes proprietary therapeutics for cancer and inflammatory diseases.
Why Does INCY Fall Short?
- Efficiency has decreased over the last five years as its adjusted operating margin fell by 15.2 percentage points
- Free cash flow margin shrank by 13.5 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- Diminishing returns on capital suggest its earlier profit pools are drying up
Incyte is trading at $71.52 per share, or 12x forward P/E. To fully understand why you should be careful with INCY, check out our full research report (it’s free).
Charles River Laboratories (CRL)
Consensus Price Target: $156.14 (3.4% implied return)
Named after the Massachusetts river where it was founded in 1947, Charles River Laboratories (NYSE:CRL) provides non-clinical drug development services, research models, and manufacturing support to pharmaceutical and biotechnology companies.
Why Are We Wary of CRL?
- 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
- Projected sales decline of 2.6% for the next 12 months points to an even tougher demand environment ahead
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
Charles River Laboratories’s stock price of $151.03 implies a valuation ratio of 15.8x forward P/E. Read our free research report to see why you should think twice about including CRL in your portfolio.
Stocks We Like More
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today