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. That said, here are three stocks where the skepticism is well-placed and some better opportunities to consider.
D.R. Horton (DHI)
Consensus Price Target: $164.69 (6.1% implied return)
One of the largest homebuilding companies in the U.S., D.R. Horton (NYSE:DHI) builds a variety of new construction homes across multiple markets.
Why Are We Hesitant About DHI?
- Backlog has dropped by 15.5% on average over the past two years, suggesting it’s losing orders as competition picks up
- Earnings per share have dipped by 8.5% annually over the past two years, which is concerning because stock prices follow EPS over the long term
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
D.R. Horton’s stock price of $155.23 implies a valuation ratio of 13.2x forward P/E. If you’re considering DHI for your portfolio, see our FREE research report to learn more.
Regions Financial (RF)
Consensus Price Target: $28.65 (4.6% 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 Does RF Fall Short?
- Net interest income trends were unexciting over the last five years as its 5.4% annual growth was below the typical banking firm
- 41 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 per share were flat over the last two years and fell short of the peer group average
Regions Financial is trading at $27.39 per share, or 1.3x forward P/B. Check out our free in-depth research report to learn more about why RF doesn’t pass our bar.
Frost Bank (CFR)
Consensus Price Target: $137.60 (5.9% implied return)
Tracing its roots back to 1868 when it was founded during Texas's post-Civil War reconstruction era, Cullen/Frost Bankers (NYSE:CFR) operates Frost Bank, a Texas-based financial institution providing commercial and consumer banking, wealth management, and insurance services.
Why Are We Cautious About CFR?
- Muted 4.9% annual revenue growth over the last two years shows its demand lagged behind its banking peers
- Incremental sales over the last two years were much less profitable as its earnings per share fell by 3.6% annually while its revenue grew
- Forecasted tangible book value per share decline of 4.1% for the upcoming 12 months implies profitability will deteriorate significantly
At $129.98 per share, Frost Bank trades at 1.8x forward P/B. Read our free research report to see why you should think twice about including CFR in your portfolio.
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 9 Market-Beating Stocks. 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 Comfort Systems (+782% 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
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