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. That said, here are three stocks where the outlook is warranted and some alternatives with better fundamentals.
John Bean (JBTM)
Consensus Price Target: $149.42 (7.3% implied return)
Tracing back to its invention of the mechanical milk bottle filler in 1884, John Bean (NYSE: JBT) designs, manufactures, and sells equipment used for food processing and aviation.
Why Does JBTM Worry Us?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Expenses have increased as a percentage of revenue over the last five years as its operating margin fell by 6.1 percentage points
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
John Bean is trading at $139.21 per share, or 20.8x forward P/E. Check out our free in-depth research report to learn more about why JBTM doesn’t pass our bar.
Cognex (CGNX)
Consensus Price Target: $47.06 (8.8% implied return)
Founded in 1981 when computer vision was in its infancy, Cognex (NASDAQ: CGNX) develops machine vision systems and software that help manufacturers and logistics companies automate quality inspection and tracking of products.
Why Do We Think Twice About CGNX?
- 2% annual revenue growth over the last two years was slower than its business services peers
- Free cash flow margin shrank by 15.8 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- Waning returns on capital imply its previous profit engines are losing steam
Cognex’s stock price of $43.25 implies a valuation ratio of 44x forward P/E. If you’re considering CGNX for your portfolio, see our FREE research report to learn more.
Cathay General Bancorp (CATY)
Consensus Price Target: $50.60 (6.9% implied return)
Founded in 1962 with its first branch in Los Angeles' Chinatown, Cathay General Bancorp (NASDAQ: CATY) operates Cathay Bank, providing commercial banking services to businesses and individuals with a strong presence in Asian-American communities.
Why Does CATY Fall Short?
- Annual sales declines of 4.4% for the past two years show its products and services struggled to connect with the market during this cycle
- 5.4% annual net interest income growth over the last five years was slower than its banking peers
- 48.3 basis point (100 basis points = 1 percentage point) decline in its net interest margin over the last two years reflects the firm’s willingness to accept lower profitability to defend its market position
At $47.34 per share, Cathay General Bancorp trades at 1.1x forward P/B. To fully understand why you should be careful with CATY, check out our full research report (it’s free).
High-Quality Stocks for All Market Conditions
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 6 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-small-cap company Exlservice (+354% 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
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