Wall Street’s bearish price targets for the stocks in this article signal serious concerns. Such forecasts are uncommon in an industry where maintaining cordial corporate relationships often trumps delivering the hard truth.
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 where the outlook is warranted and some alternatives with better fundamentals.
McCormick (MKC)
Consensus Price Target: $82.67 (8.7% implied return)
The classic red Heinz ketchup bottle’s competitor, McCormick (NYSE: MKC) sells food-flavoring products like condiments, spices, and seasoning mixes.
Why Does MKC Fall Short?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 2.2%
- Free cash flow margin shrank by 5.4 percentage points over the last year, suggesting the company is consuming more capital to stay competitive
McCormick’s stock price of $76.07 implies a valuation ratio of 24.3x forward P/E. To fully understand why you should be careful with MKC, check out our full research report (it’s free).
BeautyHealth (SKIN)
Consensus Price Target: $1.55 (-16.7% implied return)
Operating in the emerging beauty health category, the appropriately named BeautyHealth (NASDAQ: SKIN) is a skincare company best known for its Hydrafacial product that cleanses and hydrates skin.
Why Should You Sell SKIN?
- Annual revenue growth of 3.8% over the last three years was below our standards for the consumer staples sector
- Suboptimal cost structure is highlighted by its history of operating losses
- High net-debt-to-EBITDA ratio of 10× increases the risk of forced asset sales or dilutive financing if operational performance weakens
At $1.86 per share, BeautyHealth trades at 14.2x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than SKIN.
Marriott (MAR)
Consensus Price Target: $272.32 (5.5% implied return)
Founded by J. Willard Marriott in 1927, Marriott International (NASDAQ: MAR) is a global hospitality company with a portfolio of over 7,000 properties and 30 brands, spanning 130+ countries and territories.
Why Is MAR Not Exciting?
- Revenue per room has underperformed over the past two years, suggesting it may need to develop new facilities
- Estimated sales growth of 3.8% for the next 12 months implies demand will slow from its two-year trend
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 9% for the last two years
Marriott is trading at $258 per share, or 25x forward P/E. Read our free research report to see why you should think twice about including MAR in your portfolio.
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 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years.
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.
