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 facing legitimate challenges and some alternatives worth exploring instead.
Jack in the Box (JACK)
Consensus Price Target: $21.69 (-5.6% implied return)
Delighting customers since its inception in 1951, Jack in the Box (NASDAQ: JACK) is a distinctive fast-food chain known for its bold flavors, innovative menu items, and quirky marketing.
Why Should You Dump JACK?
- Disappointing same-store sales over the past two years show customers aren’t responding well to its menu offerings and dining experience
- Efficiency has decreased over the last year as its operating margin fell by 6.5 percentage points
Jack in the Box’s stock price of $22.97 implies a valuation ratio of 6x forward P/E. Dive into our free research report to see why there are better opportunities than JACK.
Quest (DGX)
Consensus Price Target: $198.38 (5.3% implied return)
Processing approximately one-third of the adult U.S. population's lab tests annually, Quest Diagnostics (NYSE: DGX) provides laboratory testing and diagnostic information services to patients, physicians, hospitals, and other healthcare providers across the United States.
Why Are We Wary of DGX?
- Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 5.3% over the last five years was below our standards for the healthcare sector
- Costs have risen faster than its revenue over the last five years, causing its adjusted operating margin to decline by 9.7 percentage points
- Eroding returns on capital suggest its historical profit centers are aging
At $188.42 per share, Quest trades at 18.7x forward P/E. If you’re considering DGX for your portfolio, see our FREE research report to learn more.
City Holding (CHCO)
Consensus Price Target: $129.60 (5.3% implied return)
With roots dating back to 1957 and a strategic presence along the I-64 and I-81 corridors, City Holding (NASDAQGS:CHCO) operates as a financial holding company providing banking, trust, and investment services through its subsidiary City National Bank across West Virginia, Kentucky, Virginia, and Ohio.
Why Are We Hesitant About CHCO?
- Muted 8.2% annual net interest income growth over the last five years shows its demand lagged behind its banking peers
- Estimated net interest income growth of 5% for the next 12 months implies demand will slow from its five-year trend
- Earnings per share lagged its peers over the last two years as they only grew by 2.9% annually
City Holding is trading at $123.12 per share, or 2.2x forward P/B. Check out our free in-depth research report to learn more about why CHCO doesn’t pass our bar.
High-Quality Stocks for All Market Conditions
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here 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 Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
