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.
CME Group (CME)
Consensus Price Target: $299.29 (-1.7% implied return)
Born from the Chicago Mercantile Exchange founded in 1898 as a butter and egg trading venue, CME Group (NASDAQ: CME) operates the world's largest derivatives marketplace where traders can buy and sell futures and options contracts across interest rates, equities, currencies, commodities, and more.
Why Are We Hesitant About CME?
- Muted 6% annual revenue growth over the last five years shows its demand lagged behind its financials peers
- Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 9.6% annually
CME Group is trading at $304.50 per share, or 25.4x forward P/E. Dive into our free research report to see why there are better opportunities than CME.
Webster Financial (WBS)
Consensus Price Target: $74.77 (3.6% implied return)
Founded during the Great Depression in 1935 and evolving into a major Northeastern financial institution, Webster Financial (NYSE: WBS) is a bank holding company that provides commercial banking, consumer banking, and employee benefits solutions through its Webster Bank and HSA Bank division.
Why Do We Think Twice About WBS?
- Sales trends were unexciting over the last two years as its 3.7% annual growth was below the typical banking company
- Projected 2.4 percentage point efficiency ratio increase over the next year signals its day-to-day expenses will rise
- Incremental sales over the last two years were less profitable as its earnings per share were flat while its revenue grew
Webster Financial’s stock price of $72.19 implies a valuation ratio of 1.2x forward P/B. To fully understand why you should be careful with WBS, check out our full research report (it’s free).
Texas Capital Bank (TCBI)
Consensus Price Target: $105.79 (1.1% 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 Does TCBI Worry Us?
- Annual net interest income growth of 3.9% over the last five years was below our standards for the banking sector
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 4.1%
- Underwhelming 7.4% return on equity reflects management’s difficulties in finding profitable growth opportunities
At $104.59 per share, Texas Capital Bank trades at 1.2x forward P/B. Read our free research report to see why you should think twice about including TCBI in your portfolio.
Stocks We Like More
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check 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 244% over the last five years (as of June 30, 2025).
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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
