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. Keeping that in mind, here is one S&P 500 stock that is positioned to outperform and two best left off your watchlist.
Two Stocks to Sell:
Adobe (ADBE)
Market Cap: $102.5 billion
Originally named after Adobe Creek that ran behind co-founder John Warnock's house, Adobe (NASDAQ: ADBE) develops software products used for digital content creation, document management, and marketing solutions across desktop, mobile, and cloud platforms.
Why Does ADBE Fall Short?
- Customers had second thoughts about committing to its platform over the last year as its average billings growth of 11.9% underwhelmed
- Estimated sales growth of 9.3% for the next 12 months implies demand will slow from its two-year trend
- Operating margin failed to increase over the last year, indicating the company couldn’t optimize its expenses
Adobe is trading at $258.12 per share, or 3.7x forward price-to-sales. If you’re considering ADBE for your portfolio, see our FREE research report to learn more.
United Airlines (UAL)
Market Cap: $34.7 billion
Founded in 1926, United Airlines Holdings (NASDAQ: UAL) operates a global airline network, providing passenger and cargo air transportation services across domestic and international routes.
Why Are We Bearish on UAL?
- Sluggish trends in its revenue passenger miles suggest customers aren’t adopting its solutions as quickly as the company hoped
- Free cash flow margin is forecasted to shrink by 3.8 percentage points in the coming year, suggesting the company will consume more capital to keep up with its competitors
- Returns on capital are growing as management invests in more worthwhile ventures
At $106.96 per share, United Airlines trades at 8.9x forward P/E. To fully understand why you should be careful with UAL, check out our full research report (it’s free).
One Stock to Buy:
Brown & Brown (BRO)
Market Cap: $22.5 billion
With roots dating back to 1939 and operations spanning 44 U.S. states and 14 countries, Brown & Brown (NYSE: BRO) is an insurance brokerage and risk management firm that markets and sells insurance products across property, casualty, and employee benefits sectors.
Why Do We Love BRO?
- Annual revenue growth of 22.4% over the last two years was superb and indicates its market share increased during this cycle
- Earnings growth has massively outpaced its peers over the last five years as its EPS has compounded at 16.9% annually
- Robust free cash flow margin of 22.7% gives it many options for capital deployment
Brown & Brown’s stock price of $67.32 implies a valuation ratio of 14.8x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.
