3 Large-Cap Stocks Skating on Thin Ice
Large-cap stocks have the power to shape entire industries thanks to their size and widespread influence. With such vast footprints, however, finding new areas for growth is much harder than for smaller, more agile players.
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. Keeping that in mind, here are three large-cap stocks that may face near-term headwinds and some other investments you should consider instead.
Market Cap: $65.21 billion
Established in 1968, Royal Caribbean Cruises (NYSE:RCL) is a global cruise vacation company renowned for its innovative and exciting cruise experiences.
Why Does RCL Fall Short?
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 9.7% for the last five years
Free cash flow margin is forecasted to shrink by 7.1 percentage points in the coming year, suggesting the company will consume more capital to keep up with its competitors
Below-average returns on capital indicate management struggled to find compelling investment opportunities
Royal Caribbean is trading at $240.33 per share, or 15.7x forward P/E. To fully understand why you should be careful with RCL, check out our full research report (it's free).
Market Cap: $48.95 billion
Founded more than a century ago, PACCAR (NASDAQ:PCAR) designs and manufactures commercial trucks of various weights and sizes for the commercial trucking industry.
Why Does PCAR Worry Us?
Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
Projected sales decline of 8.7% for the next 12 months points to a tough demand environment ahead
Earnings growth underperformed the sector average over the last two years as its EPS grew by just 1.7% annually
PACCAR's stock price of $93.65 implies a valuation ratio of 15.7x forward P/E. If you're considering PCAR for your portfolio, see our FREE research report to learn more.
Market Cap: $32.56 billion
Holding detailed financial records on over 800 million consumers worldwide and dating back to 1899, Equifax (NYSE:EFX) is a global data analytics company that collects, analyzes, and sells consumer and business credit information to lenders, employers, and other businesses.
Why Does EFX Give Us Pause?
Expenses have increased as a percentage of revenue over the last five years as its adjusted operating margin fell by 6.8 percentage points
Annual earnings per share growth of 4% underperformed its revenue over the last two years, showing its incremental sales were less profitable
Underwhelming 10.6% return on capital reflects management's difficulties in finding profitable growth opportunities, and its decreasing returns suggest its historical profit centers are aging
At $263 per share, Equifax trades at 33.1x forward P/E. Dive into our free research report to see why there are better opportunities than EFX.
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 6 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.
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