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.
Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.
Just because a business is in the green today doesn’t mean it will thrive tomorrow.
Packaged foods company Kellanova (NYSE:K) met Wall Street’s revenue expectations in Q2 CY2025, but sales were flat year on year at $3.20 billion. Its non-GAAP profit of $0.94 per share was 5.4% below analysts’ consensus estimates.
The maker of Ferrero Rocher is buying WK Kellogg for $23 per share in cash with the deal uniting everything from cereals such as Froot Loops to chocolates such as Kinder under one roof.
Mid-cap stocks have the best odds of scaling into $100 billion corporations thanks to their tested business models and large addressable markets.
But the many opportunities in front of them attract significant competition, spanning from industry behemoths with seemingly infinite resources to small, nimble players with chips on their shoulders.
The stocks featured in this article have all approached their 52-week highs.
When these price levels hit, it typically signals strong business execution, positive market sentiment, or significant industry tailwinds.
Consumer staples are considered safe havens in turbulent markets due to their inelastic demand profiles. But recently, the industry has failed to do its job as it shed 13.9% over the past six months. This performance was much worse than the S&P 500’s 1.9% loss.
While the S&P 500 (^GSPC) includes industry leaders, not every stock in the index is a winner.
Some companies are past their prime, weighed down by poor execution, weak financials, or structural headwinds.
While profitability is essential, it doesn’t guarantee long-term success.
Some companies that rest on their margins will lose ground as competition intensifies - as Jeff Bezos said, "Your margin is my opportunity".
