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. Keeping that in mind, here are three stocks where the skepticism is well-placed and some better opportunities to consider.

Honeywell (HON)

Consensus Price Target: $251.50 (8.8% implied return)

Originally founded in 1906 as a thermostat company, Honeywell (NASDAQ: HON) is a multinational conglomerate known for its aerospace systems, building technologies, performance materials, and safety and productivity solutions.

Why Are We Cautious About HON?

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. Day-to-day expenses have swelled relative to revenue over the last five years as its operating margin fell by 3.1 percentage points
3. Diminishing returns on capital suggest its earlier profit pools are drying up

At $231.12 per share, Honeywell trades at 22.1x forward P/E. To fully understand why you should be careful with HON, check out our full research report (it’s free).

Pitney Bowes (PBI)

Consensus Price Target: $12.50 (2.9% implied return)

With a century-long history dating back to 1920 and processing over 15 billion pieces of mail annually, Pitney Bowes (NYSE: PBI) provides shipping, mailing technology, logistics, and financial services to businesses of all sizes.

Why Is PBI Not Exciting?

1. Customers postponed purchases of its products and services this cycle as its revenue declined by 11.8% annually over the last five years
2. Sales are projected to tank by 3.9% over the next 12 months as its demand continues evaporating

Pitney Bowes’s stock price of $12.15 implies a valuation ratio of 8.1x forward P/E. Check out our free in-depth research report to learn more about why PBI doesn’t pass our bar.

MGIC Investment (MTG)

Consensus Price Target: $28.50 (4% implied return)

Founded in 1957 when the modern mortgage insurance industry was in its infancy, MGIC Investment (NYSE: MTG) provides private mortgage insurance that protects lenders when homebuyers default on their loans, enabling borrowers to purchase homes with smaller down payments.

Why Are We Hesitant About MTG?

1. Net premiums earned contracted by 1.1% annually over the last five years, showing unfavorable market dynamics this cycle
2. Sales are projected to remain flat over the next 12 months as demand decelerates from its two-year trend
3. Earnings growth underperformed the sector average over the last two years as its EPS grew by just 11.6% annually

MGIC Investment is trading at $27.40 per share, or 1.1x forward P/B. Read our free research report to see why you should think twice about including MTG in your portfolio.

Stocks We Like More

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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.