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.

3M (MMM)

Market Cap: $82.78 billion

Producers of the first asthma inhaler, 3M Company (NYSE: MMM) is a global conglomerate known for products in industries like healthcare, safety, electronics, and consumer goods.

Why Do We Pass on MMM?

1. Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
2. Earnings per share have dipped by 3.4% annually over the past five years, which is concerning because stock prices follow EPS over the long term
3. Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value

3M is trading at $154.91 per share, or 19.8x forward P/E. To fully understand why you should be careful with MMM, check out our full research report (it’s free).

Bristol-Myers Squibb (BMY)

Market Cap: $96.69 billion

With roots dating back to 1887 and a transformative merger in 1989 that gave the company its current name, Bristol-Myers Squibb (NYSE: BMY) discovers, develops, and markets prescription medications for serious diseases including cancer, blood disorders, immunological conditions, and cardiovascular diseases.

Why Is BMY Not Exciting?

1. Annual sales growth of 1.9% over the last two years lagged behind its healthcare peers as its large revenue base made it difficult to generate incremental demand
2. Projected sales decline of 4.4% for the next 12 months points to a tough demand environment ahead
3. Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions

Bristol-Myers Squibb’s stock price of $47.60 implies a valuation ratio of 7.2x forward P/E. If you’re considering BMY for your portfolio, see our FREE research report to learn more.

Prudential (PRU)

Market Cap: $38.59 billion

Recognized by its iconic Rock of Gibraltar logo symbolizing strength and stability since 1896, Prudential Financial (NYSE: PRU) provides life insurance, annuities, retirement solutions, investment management, and other financial services to individual and institutional customers globally.

Why Do We Avoid PRU?

1. Customers purchased fewer policies this cycle as its net premiums earned declined by 4.6% annually over the last two years
2. Forecasted revenue decline of 4.3% for the upcoming 12 months implies demand will fall even further
3. Annual book value per share declines of 11.3% for the past five years show its capital management struggled during this cycle

At $110 per share, Prudential trades at 1.2x forward P/B. Check out our free in-depth research report to learn more about why PRU doesn’t pass our bar.

Stocks We Like More

Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.

While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market 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-micro-cap company Kadant (+351% 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