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.

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.

Fortive (FTV)

Consensus Price Target: $64.36 (4.4% implied return)

Taking its name from the Latin root of "strong", Fortive (NYSE: FTV) manufactures products and develops industrial software for numerous industries.

Why Do We Avoid FTV?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 2.4% annually over the last five years
2. Earnings per share were flat over the last five years and fell short of the peer group average
3. Underwhelming 5.5% return on capital reflects management’s difficulties in finding profitable growth opportunities, and its decreasing returns suggest its historical profit centers are aging

At $61.63 per share, Fortive trades at 20.2x forward P/E. Check out our free in-depth research report to learn more about why FTV doesn’t pass our bar.

Stanley Black & Decker (SWK)

Consensus Price Target: $92.78 (6.3% implied return)

With an iconic “STANLEY” logo which has remained virtually unchanged for over a century, Stanley Black & Decker (NYSE: SWK) is a manufacturer primarily catering to the tool and outdoor equipment industry.

Why Does SWK Give Us Pause?

1. Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
2. Sales are projected to be flat over the next 12 months and imply weak demand
3. Earnings per share have dipped by 15.4% annually over the past five years, which is concerning because stock prices follow EPS over the long term

Stanley Black & Decker is trading at $87.25 per share, or 15.4x forward P/E. Read our free research report to see why you should think twice about including SWK in your portfolio.

Renasant (RNST)

Consensus Price Target: $45.57 (7.9% implied return)

Founded in 1904 during a time when the South was rebuilding its economy, Renasant (NYSE: RNST) is a regional bank holding company that offers banking, wealth management, insurance, and specialized lending services throughout the Southeast.

Why Does RNST Worry Us?

1. Muted 9.4% annual revenue growth over the last five years shows its demand lagged behind its banking peers
2. Incremental sales over the last five years were less profitable as its 5% annual earnings per share growth lagged its revenue gains
3. Muted 3.5% annual tangible book value per share growth over the last two years shows its capital generation lagged behind its banking peers

Renasant’s stock price of $42.22 implies a valuation ratio of 0.9x forward P/B. If you’re considering RNST for your portfolio, see our FREE research report to learn more.

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