While the S&P 500 (^GSPC) includes industry leaders, not every stock in the index is a winner. Some companies are past their prime, weighed down by poor execution, weak financials, or structural headwinds.
Picking the right S&P 500 stocks requires more than just buying big names, and that’s where StockStory comes in. Keeping that in mind, here is one S&P 500 stock that is leading the market forward and two best left off your watchlist.
Two Stocks to Sell:
Target (TGT)
Market Cap: $63.41 billion
With a higher focus on style and aesthetics compared to other large general merchandise retailers, Target (NYSE: TGT) serves the suburban consumer who is looking for a wide range of products under one roof.
Why Does TGT Give Us Pause?
- Products fail to spark excitement with consumers, as seen in its flat sales over the last three years
- Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and store experience
- Gross margin of 28.1% is below its competitors, leaving less money for marketing and promotions
At $139.64 per share, Target trades at 16.4x forward P/E. Dive into our free research report to see why there are better opportunities than TGT.
U.S. Bancorp (USB)
Market Cap: $98.36 billion
With roots dating back to 1863 and a presence across 26 states primarily in the Midwest and West, U.S. Bancorp (NYSE: USB) is one of America's largest banks providing lending, deposit services, wealth management, payment processing, and merchant services to individuals and businesses.
Why Are We Wary of USB?
- The company has faced growth challenges as its 6.4% annual net interest income increases over the last five years fell short of other banking companies
- Weak unit economics are reflected in its net interest margin of 2.7%, one of the worst among bank companies
- Annual earnings per share growth of 1.4% underperformed its revenue over the last five years, showing its incremental sales were less profitable
U.S. Bancorp’s stock price of $63.17 implies a valuation ratio of 1.6x forward P/B. To fully understand why you should be careful with USB, check out our full research report (it’s free).
One Stock to Buy:
Jack Henry (JKHY)
Market Cap: $10.78 billion
Founded in 1976 by two entrepreneurs who saw the need for specialized banking software in the early days of financial computing, Jack Henry & Associates (NASDAQ: JKHY) provides technology solutions that help banks and credit unions innovate, differentiate, and compete while serving the evolving needs of their accountholders.
Why Should You Buy JKHY?
- Annual revenue growth of 7.7% over the last five years was above the sector average and underscores its products and services value to customers
- Share buybacks propelled its annual earnings per share growth to 17.5%, which outperformed its revenue gains over the last two years
- ROE punches in at 24.1%, illustrating management’s expertise in identifying profitable investments
Jack Henry is trading at $156.66 per share, or 22.4x 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
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating 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.
