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.
At StockStory, we look beyond the headlines with our independent analysis to determine whether these bullish calls are justified. Keeping that in mind, here are three stocks where Wall Street may be overlooking some important risks and some alternatives with better fundamentals.
ArcBest (ARCB)
Consensus Price Target: $83.42 (21.3% implied return)
Historically owning furniture, banking, and other subsidiaries, ArcBest (NASDAQ: ARCB) offers full-truckload, less-than-truckload, and intermodal deliveries of freight.
Why Should You Sell ARCB?
- Declining 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 dipped by 32.9% annually over the past two years, which is concerning because stock prices follow EPS over the long term
- Waning returns on capital imply its previous profit engines are losing steam
ArcBest is trading at $68.78 per share, or 10.8x forward P/E. Check out our free in-depth research report to learn more about why ARCB doesn’t pass our bar.
Pitney Bowes (PBI)
Consensus Price Target: $17 (64.9% 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 Does PBI Worry Us?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 9% annually over the last five years
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
Pitney Bowes trades at a stock price of $10.31. To fully understand why you should be careful with PBI, check out our full research report (it’s free).
Meritage Homes (MTH)
Consensus Price Target: $90.64 (41.8% implied return)
Originally founded in 1985 in Arizona as Monterey Homes, Meritage Homes (NYSE: MTH) is a homebuilder specializing in designing and constructing energy-efficient and single-family homes in the US.
Why Do We Think MTH Will Underperform?
- Demand cratered as it couldn’t win new orders over the past two years, leading to an average 38.2% decline in its backlog
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 15.7 percentage points
- Diminishing returns on capital suggest its earlier profit pools are drying up
Meritage Homes’s stock price of $63.91 implies a valuation ratio of 7.1x forward P/E. Dive into our free research report to see why there are better opportunities than MTH.
High-Quality Stocks for All Market Conditions
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 9 Market-Beating Stocks. 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).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
