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.
This dynamic can trouble even the most skilled investors, but luckily for you, we started StockStory to help you navigate these trade-offs and uncover exceptional companies that break the mold. That said, here are two large-cap stocks with attractive long-term potential and one that could be stalling.
One Large-Cap Stock to Sell:
Target (TGT)
Market Cap: $48.52 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 Do We Think Twice About TGT?
- Poor same-store sales performance over the past two years indicates it’s having trouble bringing new shoppers into its brick-and-mortar locations
- Gross margin of 28% is an output of its commoditized inventory
- Poor expense management has led to an operating margin of 5.3% that is below the industry average
Target’s stock price of $104.97 implies a valuation ratio of 11.4x forward price-to-earnings. Read our free research report to see why you should think twice about including TGT in your portfolio.
Two Large-Cap Stocks to Watch:
AutoZone (AZO)
Market Cap: $64.04 billion
Aiming to be a one-stop shop for the DIY customer, AutoZone (NYSE:AZO) is an auto parts and accessories retailer that sells everything from car batteries to windshield wiper fluid to brake pads.
Why Should AZO Be on Your Watchlist?
- Same-store sales provide a solid foundation for the steady expansion of its stores
- Differentiated product assortment leads to a best-in-class gross margin of 53%
- Robust free cash flow margin of 11.1% gives it many options for capital deployment
At $3,830 per share, AutoZone trades at 23.6x forward price-to-earnings. Is now a good time to buy? Find out in our full research report, it’s free.
Amgen (AMGN)
Market Cap: $164.3 billion
Founded in 1980 during the early days of the biotechnology revolution, Amgen (NASDAQ:AMGN) is a biotechnology company that discovers, develops, and manufactures innovative medicines to treat serious illnesses like cancer, osteoporosis, and autoimmune diseases.
Why Do We Like AMGN?
- Annual revenue growth of 12.7% over the last two years beat the sector average and underscores the unique value of its offerings
- Strong free cash flow margin of 32.2% enables it to reinvest or return capital consistently
- ROIC punches in at 19.2%, illustrating management’s expertise in identifying profitable investments
Amgen is trading at $304.32 per share, or 14.7x forward price-to-earnings. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
The Trump trade may have passed, but rates are still dropping and inflation is still cooling. Opportunities are ripe for those ready to act - and we’re here to help you pick them.
Get started by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like United Rentals (+322% five-year return). Find your next big winner with StockStory today for free.