Large-cap stocks are known for their staying power and ability to weather market storms better than smaller competitors. However, their sheer size makes it more challenging to maintain high growth rates as they’ve already captured significant portions of their markets.
These trade-offs can cause headaches for even the most seasoned professionals, which is why we started StockStory - to help you find high-quality companies that can grow their earnings no matter what. That said, here are three large-cap stocks whose momentum may slow and a few alternatives you should consider instead.
Target (TGT)
Market Cap: $47.28 billion
With a higher focus on style and aesthetics compared to other large general merchandise retailers, Target (NYSE: TGT) serves the suburban consumer who is looking for a wide range of products under one roof.
Why Is TGT Not Exciting?
- Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
- Sales are projected to remain flat over the next 12 months as demand decelerates from its six-year trend
- Gross margin of 28% is below its competitors, leaving less money for marketing and promotions
At $104.06 per share, Target trades at 12.2x forward P/E. Read our free research report to see why you should think twice about including TGT in your portfolio.
Honeywell (HON)
Market Cap: $154.5 billion
Originally founded in 1906 as a thermostat company, Honeywell (NASDAQ: HON) is a multinational conglomerate known for its aerospace systems, building technologies, performance materials, and safety and productivity solutions.
Why Do We Think Twice About HON?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Earnings per share lagged its peers over the last five years as they only grew by 3.5% annually
- Free cash flow margin dropped by 3.2 percentage points over the last five years, implying the company became more capital intensive as competition picked up
Honeywell’s stock price of $240.12 implies a valuation ratio of 22.6x forward P/E. Dive into our free research report to see why there are better opportunities than HON.
MetLife (MET)
Market Cap: $54.14 billion
Founded in 1863 by a group of New York businessmen during the Civil War era, MetLife (NYSE: MET) is a global financial services company that provides insurance, annuities, employee benefits, and asset management services to individuals and businesses worldwide.
Why Should You Sell MET?
- Annual net premiums earned declines of 1.1% for the past two years show its policy sales struggled during this cycle
- Earnings growth underperformed the sector average over the last five years as its EPS grew by just 4.4% annually
- Annual book value per share declines of 12% for the past five years show its capital management struggled during this cycle
MetLife is trading at $80.65 per share, or 2.1x forward P/B. To fully understand why you should be careful with MET, check out our full research report (it’s free).
High-Quality Stocks for All Market Conditions
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our 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-small-cap company Exlservice (+354% 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
