When Wall Street turns bearish on a stock, it’s worth paying attention. These calls stand out because analysts rarely issue grim ratings on companies for fear their firms will lose out in other business lines such as 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. Keeping that in mind, here are three stocks where the outlook is warranted and some alternatives with better fundamentals.

Tapestry (TPR)

Consensus Price Target: $89.08 (1.7% implied return)

Originally founded as Coach, Tapestry (NYSE: TPR) is an American fashion conglomerate with a portfolio of luxury brands offering high-quality accessories and fashion products.

Why Are We Wary of TPR?

1. Annual revenue growth of 1.6% over the last two years was below our standards for the consumer discretionary sector
2. Weak constant currency growth over the past two years indicates challenges in maintaining its market share
3. Anticipated sales growth of 2.2% for the next year implies demand will be shaky

Tapestry’s stock price of $87.60 implies a valuation ratio of 16.8x forward P/E. Dive into our free research report to see why there are better opportunities than TPR.

3M (MMM)

Consensus Price Target: $151.88 (0.7% implied return)

Producers of the first asthma inhaler, 3M Company (NYSE: MMM) is a global conglomerate known for products in industries like healthcare, safety, electronics, and consumer goods.

Why Should You Sell MMM?

1. 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
2. Earnings per share have contracted by 3.4% annually over the last five years, a headwind for returns as stock prices often echo long-term EPS performance
3. Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value

3M is trading at $150.76 per share, or 19.3x forward P/E. Read our free research report to see why you should think twice about including MMM in your portfolio.

Texas Capital Bank (TCBI)

Consensus Price Target: $78.08 (0.8% implied return)

Founded during the Texas banking renaissance of the 1990s with an entrepreneurial spirit, Texas Capital Bancshares (NASDAQ: TCBI) is a financial services firm that provides banking, wealth management, and investment banking services to businesses and individuals across Texas and beyond.

Why Do We Think Twice About TCBI?

1. Annual net interest income growth of 3.1% over the last four years was below our standards for the bank sector
2. Inferior net interest margin of 3.1% means it must compensate for lower profitability through increased loan originations
3. Sales were less profitable over the last five years as its earnings per share fell by 21.5% annually, worse than its revenue declines

At $77.45 per share, Texas Capital Bank trades at 1.1x forward P/B. Check out our free in-depth research report to learn more about why TCBI doesn’t pass our bar.

Stocks We Like More

The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.

While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 6 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