There is now a lot of controversy over stocks going through tough times. Many institutional investors on Wall Street and elsewhere use the opportunity to take short positions with companies they expect to decline sharply from current levels. but the phenomenon WallStreetBet has destroyed some of the main institutions that tried to use that strategy. As a result, some stocks have skyrocketed despite the challenges.
Wall Street analysts are often reluctant to recommend stocks. And of course, they don’t have a perfect track record. However, seeing analysts believe there are future problems for a particular stock can be a good place to start your research. Whether you strongly agree or disagree, below we take a look at three stocks that some of the most pessimistic Wall Street analysts see falling 50% or more in the near future. The goal is to provide insights that can help you make your own decisions.
1. Across the Ocean
Shares of Drilling Professionals across the ocean (NYSE:Rick) There have been a number of ups and downs in recent years, and unfortunately long-term investors have suffered more downturns. With oil prices declining from triple-digit levels, Transocean’s stock has lost more than 90% of its value from early to mid-2010. It rose nearly seven times from its worst level last October.
Most analysts seem to think the hacker’s stock is coming too soon. It currently trades at nearly $4.50 per share. The target average price was 44% lower at $2.50, the lowest target was $0.50 per share, nearly 90% below the current share price.
Comment from Barclays Quite a representation of what Wall Street said about the Transocean in March, Barclays downgraded its rating from equal to underweight. And the $2 target price for the stock represents a cut of more than 50% from where the stock is currently trading. Barclays argued that the share price appears to be overly optimistic about the recovery in offshore drilling activity.
However, crude oil prices have been rising steadily since then. And the stock has climbed in spite of At short-term interest at about 14% of Transocean’s current float, the added strength in the oil market should help Transocean’s business, but it’s unclear whether the stock has considered a recovery.
2.American Airlines Group
Playing different recovery is a bit more controversial. American Airlines Group (NASDAQ: AAL) The company’s stock plummeted at the start of the COVID-19 pandemic as air travel came to a halt. Massive losses have plagued the airline since, and those losses could continue well into the future. But hopes for a long-term recovery have helped America’s stocks regain as much as they lost.
Analysts are also divided on American trends. Jefferys Upgrade the stock from underperforming to hold and set a stock price target of $25 per share. This pointed to a recovery trend likely to outweigh the dangers of high debt levels. However, Susquehanna analysts have not moved from negative America. And the $10 per share price target reflects the belief that domestic-only airlines will likely do better at the start of the recovery as restrictions related to the international pandemic remain in place.
With short-term interest over 14% of the stock float. Americans have a lot of investors who bet on it. But the airlines It is popular among retail investors. And that has led to the tug of war we’ve seen with many companies in the past few months.
3. AMC Entertainment Holdings
finally AMC Entertainment Holdings (NYSE: AMC) It’s a huge battleground in the investment community. The cinema operator’s stock has risen 2,500 percent since the start of the year, but analysts believe the share price will fall to the bottom of the world. with price targets ranging from $16 on the high side to just $1 on the low side. These calls indicate a 70% to 98% drop from current levels.
Here, however, the investment community itself has challenged the claims of those analysts. In early June, AMC raised $587 million through the sale of 11.55 million shares priced above $50 a share. That’s a big improvement from previous capital gains in late April and early May of 43 million shares at an average share price of less than $10.
Although – or maybe because – AMC’s share price has skyrocketed. But short-term interest remains high at 17% of the float. AMC’s business will inevitably improve as people return to the theaters in full swing. But whether a stock is profitable or not is a completely different matter.
Will Wall Street win?
Wall Street has been notoriously guilty of short selling calls in recent months. In the minds of many investors that makes such a bearish pick have the potential. buy Applicants than to avoid stocks
However, these three stocks are a reminder that stock prices will rise ahead of industry improvements. It’s very likely, though, that their underlying businesses will continue to see signs of recovery. But their stocks could still fall short-term from current levels.
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