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. Keeping that in mind, here is one large-cap stock with attractive long-term potential and two whose momentum may slow.
Two Large-Cap Stocks to Sell:
CVS Health (CVS)
Market Cap: $79.42 billion
With over 9,000 retail pharmacy locations serving as neighborhood health destinations across America, CVS Health (NYSE: CVS) operates retail pharmacies, provides pharmacy benefit management services, and offers health insurance through its Aetna subsidiary.
Why Does CVS Give Us Pause?
- Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 7% for the last two years
- Estimated sales growth of 2.5% for the next 12 months implies demand will slow from its two-year trend
- Earnings per share fell by 2.9% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
At $62.78 per share, CVS Health trades at 10.2x forward P/E. If you’re considering CVS for your portfolio, see our FREE research report to learn more.
Gartner (IT)
Market Cap: $33.52 billion
With over 2,500 research experts guiding organizations through complex technology landscapes, Gartner (NYSE: IT) provides research, advisory services, and conferences that help executives make better decisions about technology and other business priorities.
Why Are We Hesitant About IT?
- Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 9.3% annually
Gartner’s stock price of $435.88 implies a valuation ratio of 35.1x forward P/E. To fully understand why you should be careful with IT, check out our full research report (it’s free).
One Large-Cap Stock to Buy:
AutoZone (AZO)
Market Cap: $61.71 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 Will AZO Beat the Market?
- Store expansion strategy is justified by its healthy same-store sales
- Unique assortment of products and pricing power result in a best-in-class gross margin of 51.8%
- Robust free cash flow margin of 10.6% gives it many options for capital deployment
AutoZone is trading at $3,700 per share, or 22.3x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 9 Market-Beating Stocks. 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.
