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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.
Luckily for you, we at StockStory have no conflicts of interest - our sole job is to help you find genuinely promising companies. That said, here are three stocks where Wall Street’s estimates seem disconnected from reality and some better opportunities to consider.
Manitowoc (MTW)
Consensus Price Target: $12.45 (48.2% implied return)
Contracted by the United States Navy during WWII, Manitowoc (NYSE:MTW) provides cranes and lifting equipment.
Why Do We Think MTW Will Underperform?
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Product roadmap and go-to-market strategy need to be reconsidered as its backlog has averaged 9.6% declines over the past two years
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Earnings per share have contracted by 26.5% annually over the last five years, a headwind for returns as stock prices often echo long-term EPS performance
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Poor free cash flow margin of -0.2% for the last five years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
Manitowoc’s stock price of $7.57 implies a valuation ratio of 10.3x forward price-to-earnings. To fully understand why you should be careful with MTW, check out our full research report (it’s free).
Azenta (AZTA)
Consensus Price Target: $59 (114% implied return)
Serving as the guardian of some of medicine's most valuable materials, Azenta (NASDAQ:AZTA) provides biological sample management, storage, and genomic services that help pharmaceutical and biotechnology companies preserve and analyze critical research materials.
Why Do We Pass on AZTA?
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Annual sales declines of 6.5% for the past five years show its products and services struggled to connect with the market during this cycle
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Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term
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Negative free cash flow raises questions about the return timeline for its investments
Azenta is trading at $25.93 per share, or 57.4x forward price-to-earnings. If you’re considering AZTA for your portfolio, see our FREE research report to learn more.
Telephone and Data Systems (TDS)
Consensus Price Target: $52 (50.4% implied return)
Operating primarily through its majority-owned subsidiary UScellular and wholly-owned TDS Telecom, Telephone and Data Systems (NYSE:TDS) provides wireless, broadband, video, and voice communications services to 4.6 million wireless and 1.2 million broadband customers across the United States.