When Wall Street turns bearish on a stock, it’s worth paying attention. These calls stand out because analysts rarely issue grim ratings on companies for fear their firms will lose out in other business lines such as M&A advisory.
Whatever the consensus opinion may be, our team at StockStory cuts through the noise by conducting independent analysis to determine a company’s long-term prospects. That said, here are three stocks where the skepticism is well-placed and some better opportunities to consider.
Packaging Corporation of America (PKG)
Consensus Price Target: $230.20 (5.1% implied return)
Founded in 1959, Packaging Corporation of America (NYSE: PKG) produces containerboard and corrugated packaging products as well as displays and package protection.
Why Do We Think Twice About PKG?
- Underwhelming unit sales over the past two years show it’s struggled to increase its sales volumes and had to rely on price increases
- Efficiency has decreased over the last five years as its operating margin fell by 3.7 percentage points
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
At $219.12 per share, Packaging Corporation of America trades at 20.7x forward P/E. Dive into our free research report to see why there are better opportunities than PKG.
Bio-Techne (TECH)
Consensus Price Target: $70 (6.8% implied return)
With a catalog of hundreds of thousands of specialized biological products used in laboratories worldwide, Bio-Techne (NASDAQ: TECH) develops and manufactures specialized reagents, instruments, and services that help researchers study biological processes and enable diagnostic testing and cell therapy development.
Why Are We Out on TECH?
- 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
- Modest revenue base of $1.22 billion gives it less fixed cost leverage and fewer distribution channels than larger companies
- 11.6 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
Bio-Techne’s stock price of $65.57 implies a valuation ratio of 33.8x forward P/E. Check out our free in-depth research report to learn more about why TECH doesn’t pass our bar.
Bristol-Myers Squibb (BMY)
Consensus Price Target: $58.04 (6.3% 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 Does BMY Fall Short?
- 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 3.9% for the last two years
- Estimated sales decline of 6.2% for the next 12 months implies a challenging demand environment
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
Bristol-Myers Squibb is trading at $54.63 per share, or 9.6x forward P/E. To fully understand why you should be careful with BMY, check out our full research report (it’s free).
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 5 Strong Momentum Stocks for this week. 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
