1 Unpopular Stock That Should Get More Attention and 2 We Question

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 where the skepticism is well-placed.

Two Stocks to Sell:

Red Rock Resorts (RRR)

Consensus Price Target: $67.07 (9.1% implied return)

Founded in 1976, Red Rock Resorts (NASDAQ:RRR) operates a range of casino resorts and entertainment properties, primarily in the Las Vegas metropolitan area.

Why Should You Sell RRR?

1. Annual revenue growth of 9% over the last five years was below our standards for the consumer discretionary sector
2. Free cash flow margin is forecasted to shrink by 4.7 percentage points in the coming year, suggesting the company will consume more capital to keep up with its competitors
3. Unchanged returns on capital make it difficult for the company’s valuation multiple to re-rate

Red Rock Resorts’s stock price of $61.47 implies a valuation ratio of 24.8x forward P/E. To fully understand why you should be careful with RRR, check out our full research report (it’s free).

Charles River Laboratories (CRL)

Consensus Price Target: $215.73 (-1.8% 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?

1. Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
2. Demand will likely be weak over the next 12 months as Wall Street expects flat revenue
3. Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value

Charles River Laboratories is trading at $219.61 per share, or 21.3x forward P/E. Read our free research report to see why you should think twice about including CRL in your portfolio.

One Stock to Watch:

Yum! Brands (YUM)

Consensus Price Target: $166.17 (8.7% 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 Do We Like YUM?

1. Fast expansion of new restaurants indicates an aggressive approach to attacking untapped market opportunities
2. Disciplined cost controls and effective management resulted in a strong two-year operating margin of 31.7%
3. Strong free cash flow margin of 19.2% enables it to reinvest or return capital consistently

At $152.83 per share, Yum! Brands trades at 23.9x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.

Stocks We Like Even More

Check out the high-quality names we’ve flagged in 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 244% over the last five years (as of June 30, 2025).

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 Exlservice (+354% five-year return). Find your next big winner with StockStory today.