1 Unpopular Stock That Deserves a Second Chance and 2 Facing Headwinds

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 is one stock where Wall Street’s pessimism is creating a buying opportunity and two where the skepticism is well-placed.

Two Stocks to Sell:

Arhaus (ARHS)

Consensus Price Target: $9.88 (1.8% implied return)

With an aesthetic that features natural materials such as reclaimed wood, Arhaus (NASDAQ:ARHS) is a high-end furniture retailer that sells everything from sofas to rugs to bookcases.

Why Are We Hesitant About ARHS?

1. Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and store experience
2. Modest revenue base of $1.29 billion gives it less fixed cost leverage and fewer distribution channels than larger companies
3. Efficiency has decreased over the last year as its operating margin fell by 5 percentage points

Arhaus’s stock price of $9.70 implies a valuation ratio of 19.4x forward P/E. Dive into our free research report to see why there are better opportunities than ARHS.

Arbor Realty Trust (ABR)

Consensus Price Target: $11.63 (-2% implied return)

With roots dating back to 2003 and a focus on the stability of multifamily housing, Arbor Realty Trust (NYSE:ABR) is a specialized lender that provides financing solutions for multifamily and commercial real estate while also originating and servicing government-backed mortgage loans.

Why Should You Sell ABR?

1. Annual sales declines of 4.8% for the past two years show its products and services struggled to connect with the market during this cycle
2. Performance over the past two years shows each sale was less profitable as its earnings per share dropped by 17.6% annually, worse than its revenue
3. Loan losses and capital returns have eroded its tangible book value per share this cycle as its tangible book value per share declined by 2.3% annually over the last two years

At $11.86 per share, Arbor Realty Trust trades at 1x forward P/B. To fully understand why you should be careful with ABR, check out our full research report (it’s free).

One Stock to Watch:

Yum! Brands (YUM)

Consensus Price Target: $160.13 (11.1% implied return)

Spun off as an independent company from PepsiCo, Yum! Brands (NYSE:YUM) is a multinational corporation that owns KFC, Pizza Hut, Taco Bell, and The Habit Burger Grill.

Why Does YUM Stand Out?

1. Bold push to open new restaurants demonstrates an ambitious strategy to establish itself in underpenetrated territories
2. Disciplined cost controls and effective management resulted in a strong two-year operating margin of 32.1%
3. Strong free cash flow margin of 18.9% enables it to reinvest or return capital consistently

Yum! Brands is trading at $144.20 per share, or 23.4x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.

Stocks We Like Even More

Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

Take advantage of the rebound by checking out our Top 9 Market-Beating Stocks. 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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free.

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