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.
At StockStory, we look beyond the headlines with our independent analysis to determine whether these bearish calls are justified. Keeping that in mind, here are three stocks where the outlook is warranted and some alternatives with better fundamentals.
Masco (MAS)
Consensus Price Target: $80.67 (0.2% implied return)
Headquartered just outside of Detroit, MI, Masco (NYSE: MAS) designs and manufactures home-building products such as glass shower doors, decorative lighting, bathtubs, and faucets.
Why Do We Steer Clear of MAS?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Estimated sales growth of 1.7% for the next 12 months is soft and implies weaker demand
- Eroding returns on capital suggest its historical profit centers are aging
At $80.49 per share, Masco trades at 18.4x forward P/E. Dive into our free research report to see why there are better opportunities than MAS.
Bristol-Myers Squibb (BMY)
Consensus Price Target: $63.08 (8.3% implied return)
With roots dating back to 1887 and a transformative merger in 1989 that gave the company its current name, Bristol-Myers Squibb (NYSE: BMY) discovers, develops, and markets prescription medications for serious diseases including cancer, blood disorders, immunological conditions, and cardiovascular diseases.
Why Is BMY Not Exciting?
- Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 2.6% for the last five years
- Forecasted revenue decline of 5.5% for the upcoming 12 months implies demand will fall off a cliff
- Expenses have increased as a percentage of revenue over the last five years as its adjusted operating margin fell by 10.4 percentage points
Bristol-Myers Squibb’s stock price of $58.26 implies a valuation ratio of 9.4x forward P/E. To fully understand why you should be careful with BMY, check out our full research report (it’s free).
Western Alliance Bancorporation (WAL)
Consensus Price Target: $88.93 (7.5% implied return)
Operating through five distinct regional banking divisions across the western United States, Western Alliance Bancorporation (NYSE: WAL) provides commercial banking, treasury management, mortgage services, and specialized financial solutions through its banking divisions and subsidiaries.
Why Does WAL Give Us Pause?
- Net interest margin increased by -3.6 basis points (100 basis points = 1 percentage point) over the last two years, giving the firm more capital to invest or return to shareholders
- Efficiency ratio is expected to worsen by 6 percentage points over the next year
- Annual earnings per share growth of 5.8% underperformed its revenue over the last five years, showing its incremental sales were less profitable
Western Alliance Bancorporation is trading at $82.75 per share, or 1.1x forward P/B. If you’re considering WAL for your portfolio, see our FREE research report to learn more.
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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
