Wall Street has set ambitious price targets for the stocks in this article. While this suggests attractive upside potential, it’s important to remain skeptical because analysts face institutional pressures that can sometimes lead to overly optimistic forecasts.
Luckily for you, we at StockStory have no conflicts of interest - our sole job is to help you find genuinely promising companies. That said, here are three stocks where Wall Street’s estimates seem disconnected from reality and some better opportunities to consider.
Manitowoc (MTW)
Consensus Price Target: $12.45 (48.2% implied return)
Contracted by the United States Navy during WWII, Manitowoc (NYSE: MTW) provides cranes and lifting equipment.
Why Do We Think MTW Will Underperform?
- Product roadmap and go-to-market strategy need to be reconsidered as its backlog has averaged 9.6% declines over the past two years
- Earnings per share have contracted by 26.5% annually over the last five years, a headwind for returns as stock prices often echo long-term EPS performance
- Poor free cash flow margin of -0.2% for the last five years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
Manitowoc’s stock price of $7.57 implies a valuation ratio of 10.3x forward price-to-earnings. Read our free research report to see why you should think twice about including MTW in your portfolio.
Azenta (AZTA)
Consensus Price Target: $59 (114% implied return)
Serving as the guardian of some of medicine's most valuable materials, Azenta (NASDAQ: AZTA) provides biological sample management, storage, and genomic services that help pharmaceutical and biotechnology companies preserve and analyze critical research materials.
Why Do We Pass on AZTA?
- Annual sales declines of 6.5% for the past five years show its products and services struggled to connect with the market during this cycle
- Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term
- Negative free cash flow raises questions about the return timeline for its investments
Azenta is trading at $25.93 per share, or 57.4x forward price-to-earnings. Check out our free in-depth research report to learn more about why AZTA doesn’t pass our bar.
Telephone and Data Systems (TDS)
Consensus Price Target: $52 (50.4% implied return)
Operating primarily through its majority-owned subsidiary UScellular and wholly-owned TDS Telecom, Telephone and Data Systems (NYSE: TDS) provides wireless, broadband, video, and voice communications services to 4.6 million wireless and 1.2 million broadband customers across the United States.
Why Is TDS Risky?
- Sales tumbled by 1.3% annually over the last four years, showing market trends are working against its favor during this cycle
- Earnings per share have dipped by 30.7% annually over the past five years, which is concerning because stock prices follow EPS over the long term
- High net-debt-to-EBITDA ratio of 23× could force the company to raise capital at unfavorable terms if market conditions deteriorate
At $35.56 per share, Telephone and Data Systems trades at 3.1x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than TDS.
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 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today for free.
