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.
Unlike the investment banks, we created StockStory to provide independent analysis that helps you determine which companies are truly worth following. Keeping that in mind, here are three stocks where Wall Street may be overlooking some important risks and some alternatives with better fundamentals.
Mayville Engineering (MEC)
Consensus Price Target: $21 (53.5% implied return)
Originally founded solely on tool and die manufacturing, Mayville Engineering Company (NYSE:MEC) specializes in metal fabrication, tube bending, and welding to be used in various industries.
Why Are We Wary of MEC?
- Annual sales declines of 2% for the past two years show its products and services struggled to connect with the market during this cycle
- Gross margin of 12.8% is below its competitors, leaving less money to invest in areas like marketing and R&D
- Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
At $13.68 per share, Mayville Engineering trades at 14.4x forward P/E. If you’re considering MEC for your portfolio, see our FREE research report to learn more.
Delta (DAL)
Consensus Price Target: $65.87 (22.7% implied return)
One of the ‘Big Four’ airlines in the US, Delta Air Lines (NYSE:DAL) is a major global air carrier that serves both business and leisure travelers through its domestic and international flights.
Why Do We Think DAL Will Underperform?
- Sluggish trends in its revenue passenger miles suggest customers aren’t adopting its solutions as quickly as the company hoped
- Estimated sales growth of 1.9% for the next 12 months implies demand will slow from its two-year trend
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
Delta’s stock price of $53.66 implies a valuation ratio of 9x forward P/E. Dive into our free research report to see why there are better opportunities than DAL.
Organon (OGN)
Consensus Price Target: $13.17 (42.7% implied return)
Spun off from Merck in 2021 to create a company dedicated to addressing unmet needs in women's health, Organon (NYSE:OGN) is a global healthcare company focused on improving women's health through prescription therapies, medical devices, biosimilars, and established medicines.
Why Are We Cautious About OGN?
- Sales tumbled by 2.6% annually over the last five years, showing market trends are working against its favor during this cycle
- Performance over the past five years shows each sale was less profitable as its earnings per share dropped by 18.5% annually, worse than its revenue
- Free cash flow margin shrank by 25.6 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
Organon is trading at $9.23 per share, or 2.4x forward P/E. Check out our free in-depth research report to learn more about why OGN doesn’t pass our bar.
High-Quality Stocks for All Market Conditions
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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).
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