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.
Whatever the consensus opinion may be, our team at StockStory cuts through the noise by conducting independent analysis to determine a company’s long-term prospects. Keeping that in mind, here are three stocks where the skepticism is well-placed and some better opportunities to consider.
MasterCraft (MCFT)
Consensus Price Target: $18.75 (-7.8% implied return)
Started by a waterskiing instructor, MasterCraft (NASDAQ: MCFT) specializes in designing, manufacturing, and selling sport boats.
Why Is MCFT Not Exciting?
- Sluggish trends in its boats sold suggest customers aren’t adopting its solutions as quickly as the company hoped
- Capital intensity will likely increase as its free cash flow margin is anticipated to drop by 13.8 percentage points over the next year
- Eroding returns on capital suggest its historical profit centers are aging
MasterCraft is trading at $20.35 per share, or 16x forward P/E. Check out our free in-depth research report to learn more about why MCFT doesn’t pass our bar.
Norfolk Southern (NSC)
Consensus Price Target: $295.58 (4.6% implied return)
Starting with a single route from Virginia to North Carolina, Norfolk Southern (NYSE: NSC) is a freight transportation company operating a major railroad network across the eastern United States.
Why Do We Pass on NSC?
- Underwhelming unit sales over the past two years indicate demand is soft and that the company may need to revise its strategy
- Earnings per share have contracted by 4.5% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
- 7.8 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
Norfolk Southern’s stock price of $282.50 implies a valuation ratio of 21.1x forward P/E. To fully understand why you should be careful with NSC, check out our full research report (it’s free).
Mettler-Toledo (MTD)
Consensus Price Target: $1,276 (-2.8% implied return)
With roots dating back to the precision balance innovations of Swiss engineer Erhard Mettler, Mettler-Toledo (NYSE: MTD) manufactures precision weighing instruments, analytical equipment, and product inspection systems used in laboratories, industrial settings, and food retail.
Why Are We Hesitant About MTD?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Anticipated sales growth of 4.5% for the next year implies demand will be shaky
- Adjusted operating profits fell over the last two years as its sales dropped and it struggled to adjust its fixed costs
At $1,314 per share, Mettler-Toledo trades at 29.9x forward P/E. If you’re considering MTD for your portfolio, see our FREE research report to learn more.
High-Quality Stocks for All Market Conditions
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at 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 183% over the last five years (as of March 31st 2025).
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