1 S&P 500 Stock with Promising Prospects and 2 Facing Challenges
The S&P 500 (^GSPC) is often seen as a benchmark for strong businesses, but that doesn’t mean every stock is worth owning. Some companies face significant challenges, whether it’s stagnating growth, heavy debt, or disruptive new competitors.
Some large-cap stocks are past their peak, and StockStory is here to help you separate the winners from the laggards. That said, here is one S&P 500 stock that is positioned to outperform and two that could be in trouble.
Two Stocks to Sell:
Bristol-Myers Squibb (BMY)
Market Cap: $136.8 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 Does BMY Give Us Pause?
- Annual sales growth of 2.1% over the last five years lagged behind its healthcare peers as its large revenue base made it difficult to generate incremental demand
- Efficiency has decreased over the last five years as its adjusted operating margin fell by 8.2 percentage points
- Incremental sales over the last five years were less profitable as its earnings per share were flat while its revenue grew
At $66.99 per share, Bristol-Myers Squibb trades at 10.5x forward P/E. Dive into our free research report to see why there are better opportunities than BMY.
Bank of America (BAC)
Market Cap: $427.7 billion
Tracing its roots back to 1784 and now serving approximately 67 million consumer and small business clients, Bank of America (NYSE:BAC) is a global financial institution that provides banking, investing, asset management, and risk management products and services to individuals, businesses, and governments.
Why Is BAC Not Exciting?
- Scale is a double-edged sword because it limits the firm’s growth potential compared to its smaller competitors, as reflected in its below-average annual net interest income increases of 9% for the last five years
- Inferior net interest margin of 2% means it must compensate for lower profitability through increased loan originations
- Capital generation will likely be soft over the next 12 months as Wall Street’s estimates imply tepid tangible book value per share growth of 7.4%
Bank of America’s stock price of $61.32 implies a valuation ratio of 1.5x forward P/B. Read our free research report to see why you should think twice about including BAC in your portfolio.
One Stock to Watch:
Flex (FLEX)
Market Cap: $42.59 billion
Originally known as Flextronics until its 2016 rebranding, Flex (NASDAQ:FLEX) is a global manufacturing partner that designs, engineers, and builds products for companies across industries from medical devices to solar trackers.
Why Could FLEX Be a Winner?
- Enormous revenue base of $29.27 billion provides significant distribution advantages
- Market share is on track to rise over the next 12 months as its 25.7% projected revenue growth implies demand will accelerate from its two-year trend
- Share buybacks catapulted its annual earnings per share growth to 20.6%, which outperformed its revenue gains over the last two years
Flex is trading at $113.61 per share, or 21.4x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 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-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.