The S&P 500 (^GSPC) is home to the biggest and most well-known companies in the market, making it a go-to index for investors seeking stability. But not all large-cap stocks are created equal - some are struggling with slowing growth, declining margins, or increased competition.

Some large-cap stocks are past their peak, and StockStory is here to help you separate the winners from the laggards. That said, here are three S&P 500 stocks that don’t make the cut and some better choices instead.

Starbucks (SBUX)

Market Cap: $94.23 billion

Started by three friends in Seattle’s historic Pike Place Market, Starbucks (NASDAQ: SBUX) is a globally-renowned coffeehouse chain that offers a wide selection of high-quality coffee, beverages, and food items.

Why Do We Steer Clear of SBUX?

1. Disappointing same-store sales over the past two years show customers aren’t responding well to its menu offerings and dining experience
2. Estimated sales growth of 3.1% for the next 12 months implies demand will slow from its six-year trend
3. Expenses have increased as a percentage of revenue over the last year as its operating margin fell by 7.1 percentage points

Starbucks’s stock price of $82.75 implies a valuation ratio of 34.4x forward P/E. Dive into our free research report to see why there are better opportunities than SBUX.

United Parcel Service (UPS)

Market Cap: $78.75 billion

Trademarking its recognizable UPS Brown color, UPS (NYSE: UPS) offers package delivery, supply chain management, and freight forwarding services.

Why Should You Sell UPS?

1. Declining unit sales over the past two years show it’s struggled to increase its sales volumes and had to rely on price increases
2. Performance over the past five years shows its incremental sales were less profitable as its earnings per share were flat
3. Waning returns on capital imply its previous profit engines are losing steam

United Parcel Service is trading at $92.85 per share, or 13.5x forward P/E. Read our free research report to see why you should think twice about including UPS in your portfolio.

Citigroup (C)

Market Cap: $182 billion

With operations in nearly 160 countries and a history dating back to 1812, Citigroup (NYSE: C) is a global financial services company that provides banking, investment, wealth management, and payment solutions to consumers, corporations, and governments.

Why Are We Cautious About C?

1. Scale is a double-edged sword because it limits the firm’s growth potential compared to its smaller competitors, as reflected in its below-average annual net interest income increases of 5.9% for the last five years
2. Estimated net interest income growth of 2.3% for the next 12 months implies demand will slow from its five-year trend
3. Weak unit economics are reflected in its net interest margin of 2.4%, one of the worst among bank companies

At $101.85 per share, Citigroup trades at 0.9x forward P/B. To fully understand why you should be careful with C, check out our full research report (it’s free for active Edge members).

Stocks We Like More

Fresh US-China trade tensions just tanked stocks—but strong bank earnings are fueling a sharp rebound. Don’t miss the bounce.

Don’t let fear keep you from great opportunities and take a look at Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% 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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