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. Keeping that in mind, here are three stocks facing legitimate challenges and some alternatives worth exploring instead.
Allegion (ALLE)
Consensus Price Target: $181.27 (2.2% implied return)
Allegion plc (NYSE:ALLE) is a provider of security products and solutions that keep people and assets safe and secure in various environments.
Why Are We Cautious About ALLE?
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 7.3%
- Waning returns on capital imply its previous profit engines are losing steam
At $177.44 per share, Allegion trades at 20.1x forward P/E. If you’re considering ALLE for your portfolio, see our FREE research report to learn more.
Artisan Partners (APAM)
Consensus Price Target: $43 (-4% implied return)
Founded in 1994 with a focus on autonomous investment teams and a "high-value-added" approach, Artisan Partners (NYSE:APAM) is an investment management firm that offers actively managed equity and fixed income strategies to institutional and individual investors.
Why Are We Wary of APAM?
- Muted 5.9% annual revenue growth over the last five years shows its demand lagged behind its financials peers
- Incremental sales over the last five years were less profitable as its 3.4% annual earnings per share growth lagged its revenue gains
Artisan Partners’s stock price of $44.77 implies a valuation ratio of 10.6x forward P/E. Check out our free in-depth research report to learn more about why APAM doesn’t pass our bar.
Regions Financial (RF)
Consensus Price Target: $30.44 (0.6% implied return)
Tracing its roots back to 1971 and operating in a region known as the "heart of Dixie," Regions Financial (NYSE:RF) is a financial holding company that provides banking services, wealth management, and specialty financial solutions across the South, Midwest, and Texas.
Why Is RF Not Exciting?
- 5.1% annual net interest income growth over the last five years was slower than its banking peers
- 38.2 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
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 2.2% annually
Regions Financial is trading at $30.27 per share, or 1.4x forward P/B. Read our free research report to see why you should think twice about including RF in your portfolio.
High-Quality Stocks for All Market Conditions
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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.