Wall Street is overwhelmingly bullish on the stocks in this article, with price targets suggesting significant upside potential. However, it’s worth remembering that analysts rarely issue sell ratings, partly because their firms often seek other business from the same companies they cover.
At StockStory, we look beyond the headlines with our independent analysis to determine whether these bullish calls are justified. That said, here are three stocks where Wall Street may be overlooking some important risks and some alternatives with better fundamentals.
Macy's (M)
Consensus Price Target: $13.89 (13.3% implied return)
With a storied history that began with its 1858 founding, Macy’s (NYSE: M) is a department store chain that sells clothing, cosmetics, accessories, and home goods.
Why Do We Avoid M?
- Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and store experience
- Sales are expected to decline once again over the next 12 months as it continues working through a challenging demand environment
- Responsiveness to unforeseen market trends is restricted due to its substandard operating margin profitability
Macy's is trading at $12.26 per share, or 6.4x forward P/E. Read our free research report to see why you should think twice about including M in your portfolio.
MGP Ingredients (MGPI)
Consensus Price Target: $39 (35.7% implied return)
Headquartered in Atchison, Kansas, MGP Ingredients (NASDAQ: MGPI) is a leading supplier of high-quality ingredients to the food and beverage industry
Why Is MGPI Risky?
- Sales tumbled by 2.8% annually over the last three years, showing consumer trends are working against its favor
- Forecasted revenue decline of 19.8% for the upcoming 12 months implies demand will fall even further
- Operating profits fell over the last year as its sales dropped and it struggled to adjust its fixed costs
MGP Ingredients’s stock price of $28.74 implies a valuation ratio of 10.7x forward P/E. Check out our free in-depth research report to learn more about why MGPI doesn’t pass our bar.
Caesars Entertainment (CZR)
Consensus Price Target: $42.87 (65.3% implied return)
Formerly Eldorado Resorts, Caesars Entertainment (NASDAQ: CZR) is a global gaming and hospitality company operating numerous casinos, hotels, and resort properties.
Why Is CZR Not Exciting?
- Sales were flat over the last two years, indicating it's failed to expand its business
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 25.8% annually while its revenue grew
- Short cash runway increases the probability of a capital raise that dilutes existing shareholders
At $25.93 per share, Caesars Entertainment trades at 1.4x forward EV-to-EBITDA. To fully understand why you should be careful with CZR, check out our full research report (it’s free).
Stocks We Like More
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking 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 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free.
