3 Unpopular Stocks We Approach with Caution

Wall Street has issued downbeat forecasts for the stocks in this article. These predictions are rare - financial institutions typically hesitate to say bad things about a company because it can jeopardize their other revenue-generating business lines like M&A advisory.

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. Keeping that in mind, here are three stocks where the skepticism is well-placed and some better opportunities to consider.

CME Group (CME)

Consensus Price Target: $299.29 (-1.7% implied return)

Born from the Chicago Mercantile Exchange founded in 1898 as a butter and egg trading venue, CME Group (NASDAQ:CME) operates the world's largest derivatives marketplace where traders can buy and sell futures and options contracts across interest rates, equities, currencies, commodities, and more.

Why Are We Hesitant About CME?

1. Muted 6% annual revenue growth over the last five years shows its demand lagged behind its financials peers
2. Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 9.6% annually

CME Group is trading at $304.50 per share, or 25.4x forward P/E. Dive into our free research report to see why there are better opportunities than CME.

Webster Financial (WBS)

Consensus Price Target: $74.77 (3.6% implied return)

Founded during the Great Depression in 1935 and evolving into a major Northeastern financial institution, Webster Financial (NYSE:WBS) is a bank holding company that provides commercial banking, consumer banking, and employee benefits solutions through its Webster Bank and HSA Bank division.

Why Do We Think Twice About WBS?

1. Sales trends were unexciting over the last two years as its 3.7% annual growth was below the typical banking company
2. Projected 2.4 percentage point efficiency ratio increase over the next year signals its day-to-day expenses will rise
3. Incremental sales over the last two years were less profitable as its earnings per share were flat while its revenue grew

Webster Financial’s stock price of $72.19 implies a valuation ratio of 1.2x forward P/B. To fully understand why you should be careful with WBS, check out our full research report (it’s free).

Texas Capital Bank (TCBI)

Consensus Price Target: $105.79 (1.1% implied return)

Founded during the Texas banking renaissance of the 1990s with an entrepreneurial spirit, Texas Capital Bancshares (NASDAQ:TCBI) is a financial services firm that provides banking, wealth management, and investment banking services to businesses and individuals across Texas and beyond.

Why Does TCBI Worry Us?

1. Annual net interest income growth of 3.9% over the last five years was below our standards for the banking sector
2. Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 4.1%
3. Underwhelming 7.4% return on equity reflects management’s difficulties in finding profitable growth opportunities

At $104.59 per share, Texas Capital Bank trades at 1.2x forward P/B. Read our free research report to see why you should think twice about including TCBI in your portfolio.

Stocks We Like More

If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.

Don’t wait for the next volatility shock. Check out 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.