
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 skepticism is well-placed and some better opportunities to consider.
Mondelez (MDLZ)
Consensus Price Target: $67.20 (10.3% implied return)
Founded as Nabisco in 1903, Mondelez (NASDAQ:MDLZ) is a packaged snacks powerhouse best known for its Oreo, Cadbury, Toblerone, Ritz, and Trident brands.
Why Does MDLZ Worry Us?
- Shrinking unit sales over the past two years suggest it might have to lower prices to stimulate growth
- Estimated sales growth of 2.5% for the next 12 months implies demand will slow from its three-year trend
- Incremental sales over the last three years were much less profitable as its earnings per share fell by 2% annually while its revenue grew
Mondelez is trading at $60.92 per share, or 19.2x forward P/E. Read our free research report to see why you should think twice about including MDLZ in your portfolio.
First Hawaiian Bank (FHB)
Consensus Price Target: $28 (1.8% implied return)
Dating back to 1858 as Hawaii's oldest bank with deep roots in the Pacific island communities, First Hawaiian (NASDAQ:FHB) operates a full-service community bank providing deposit accounts, commercial and consumer loans, credit cards, and wealth management services across Hawaii, Guam, and Saipan.
Why Should You Sell FHB?
- Muted 5% annual net interest income growth over the last five years shows its demand lagged behind its banking peers
- Net interest margin of 3.1% reflects its high servicing and capital costs
- Capital trends were unexciting over the last five years as its 2.3% annual tangible book value per share growth was below the typical banking firm
At $27.52 per share, First Hawaiian Bank trades at 1.1x forward P/B. Check out our free in-depth research report to learn more about why FHB doesn’t pass our bar.
Viasat (VSAT)
Consensus Price Target: $60.57 (-7.6% implied return)
Operating a fleet of 23 satellites that orbit the Earth and beam connectivity from space, Viasat (NASDAQ:VSAT) provides satellite-based communications networks and services for airlines, maritime vessels, governments, businesses, and residential customers worldwide.
Why Are We Hesitant About VSAT?
- Revenue growth over the past five years was nullified by the company’s new share issuances as its earnings per share fell by 2.6% annually
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
- Push for growth has led to negative returns on capital, signaling value destruction
Viasat’s stock price of $65.53 implies a valuation ratio of 86.7x forward P/E. Dive into our free research report to see why there are better opportunities than VSAT.
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