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.
Accurately determining a company’s long-term prospects isn’t easy, especially when sentiment is weak. That’s where StockStory comes in - to help you find attractive investment candidates backed by unbiased research. That said, here are three stocks where the outlook is warranted and some alternatives with better fundamentals.
Donaldson (DCI)
Consensus Price Target: $89.80 (-2.5% implied return)
Playing a vital role in the historic Apollo 11 mission, Donaldson (NYSE:DCI) manufacturers and sells filtration equipment for various industries.
Why Does DCI Worry Us?
- Sales trends were unexciting over the last two years as its 4.2% annual growth was below the typical industrials company
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Anticipated sales growth of 3.7% for the next year implies demand will be shaky
At $92.14 per share, Donaldson trades at 18.7x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including DCI in your portfolio.
Sealed Air (SEE)
Consensus Price Target: $45.13 (8.4% implied return)
Founded in 1960, Sealed Air Corporation (NYSE: SEE) specializes in the development and production of protective and food packaging solutions, serving a variety of industries.
Why Is SEE Risky?
- Flat unit sales over the past two years show it’s struggled to increase its sales volumes and had to rely on price increases
- Sales are projected to be flat over the next 12 months and imply weak demand
- Eroding returns on capital suggest its historical profit centers are aging
Sealed Air is trading at $41.65 per share, or 12.8x forward P/E. If you’re considering SEE for your portfolio, see our FREE research report to learn more.
Selective Insurance Group (SIGI)
Consensus Price Target: $83.43 (5.9% implied return)
Founded in 1926 during the early days of automobile insurance, Selective Insurance Group (NASDAQ:SIGI) is a property and casualty insurance company that sells commercial, personal, and excess and surplus lines insurance products through independent agents.
Why Are We Wary of SIGI?
- Operational productivity has decreased over the last five years as its combined ratio worsened by 2.3 percentage points
- Performance over the past two years shows its incremental sales were less profitable, as its 9.2% annual earnings per share growth trailed its revenue gains
- Muted 6.4% annual book value per share growth over the last five years shows its capital generation lagged behind its insurance peers
Selective Insurance Group’s stock price of $78.80 implies a valuation ratio of 1.4x forward P/B. Dive into our free research report to see why there are better opportunities than SIGI.
Stocks We Like More
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 5 Growth Stocks for this month. 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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.