3 Unpopular Stocks Walking a Fine Line

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 three stocks where the skepticism is well-placed and some better opportunities to consider.

Inter Parfums (IPAR)

Consensus Price Target: $126.67 (9.6% implied return)

With licenses to produce colognes and perfumes under brands such as Kate Spade, Van Cleef & Arpels, and Abercrombie & Fitch, Inter Parfums (NASDAQ:IPAR) manufactures and distributes fragrances worldwide.

Why Are We Cautious About IPAR?

1. Revenue base of $1.50 billion puts it at a disadvantage compared to larger competitors exhibiting economies of scale
2. Estimated sales growth of 2% for the next 12 months implies demand will slow from its three-year trend
3. Day-to-day expenses have swelled relative to revenue over the last year as its operating margin fell by 1.7 percentage points

Inter Parfums’s stock price of $115.59 implies a valuation ratio of 23.5x forward P/E. Dive into our free research report to see why there are better opportunities than IPAR.

Scholastic (SCHL)

Consensus Price Target: $42 (4.6% implied return)

Creator of the legendary Scholastic Book Fair, Scholastic (NASDAQ:SCHL) is an international company specializing in children’s publishing, education, and media services.

Why Do We Pass on SCHL?

1. Sales trends were unexciting over the last five years as its 4% annual growth was below the typical consumer discretionary company
2. Projected 25.6 percentage point decline in its free cash flow margin next year reflects the company’s plans to increase its investments to defend its market position
3. Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned

At $40.14 per share, Scholastic trades at 23.2x forward P/E. Read our free research report to see why you should think twice about including SCHL in your portfolio.

The Hanover Insurance Group (THG)

Consensus Price Target: $236.50 (6% implied return)

Founded in 1852 during a time when fire insurance was crucial for protecting businesses and homes, The Hanover Insurance Group (NYSE:THG) provides property and casualty insurance products through independent agents, serving individuals, small businesses, and mid-sized companies.

Why Do We Think Twice About THG?

1. Sales trends were unexciting over the last two years as its 4.9% annual growth was below the typical insurance company
2. 4.1% annualized net premiums earned growth over the last two years lagged behind its insurance peers
3. Capital trends were unexciting over the last five years as its 3.6% annual book value per share growth was below the typical insurance firm

The Hanover Insurance Group is trading at $223.13 per share, or 2x forward P/B. To fully understand why you should be careful with THG, check out our full research report (it’s free).

Stocks We Like More

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 (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.