With the year-end holidays approaching, financial markets are entering a traditional portfolio consolidation period. December is traditionally the best time for investors to review their positions, realize tax losses, and adjust their allocations for next year. While the overall US stock market is expected to strengthen in 2025, some large-cap stocks will still underperform. Benzinga has identified five stocks that investors may consider selling before 2026. This is purely market observation and not investment advice.
Target (NYSE: TGT)
2025 will be a challenging year for Target (NYSE: TGT). Target is one of the few U.S. retailers consistently underperforming. Despite a P/E ratio of 11 and a P/S ratio of only 0.39, the struggling retailer is facing pressure on both profitability and profit margins. In its third-quarter fiscal 2026 earnings report, Target's same-store sales declined by 2.7%, and management lowered its full-year fiscal 2025 earnings per share forecast to $7 to $8. Following the November 19th conference call, analysts downgraded the stock 11 times.
Deere, Inc. (NYSE: DE)
Agricultural machinery company Deere (NYSE: DE) is one of the traditional industries hardest hit by Trump's trade war. Although its revenue and EPS for the fourth quarter of fiscal year 2025 both exceeded market expectations, its guidance is very conservative due to the anticipated pre-tax tariff losses of more than $1.2 billion in 2026. Coupled with the agricultural crisis in the U.S. Midwest, Deere faces many negative factors as it enters 2026.
The stock attempted a rebound over the past six weeks, but momentum appears to have weakened. Following an earlier death cross, the 200-day moving average has become a strong resistance level, keeping the share price below the low opened when the company released its Q3 2025 financial report in August. Another warning sign is the MACD indicator, which has turned lower again after nearly two months of gains.
Tesla (NASDAQ: TSLA)
Tesla (NASDAQ:TSLA) stock price has always been highly volatile, and recently it has once again faced challenges from overvaluation and competitive pressure. TSLA's price-to-earnings ratio exceeds 300 times, its price-to-sales ratio is over 15 times, and its free cash flow valuation reaches 200 times. Tesla's current price-to-earnings ratio is at a very high level, reflecting the market's high expectations for its future growth, and also meaning that the stock price has relatively stringent requirements for earnings performance. Such valuations are usually accompanied by large stock price fluctuations.
Tesla's European car sales continue to plummet, BYD has become a strong competitor in China's electric vehicle market, and the expiration of the US electric vehicle tax credit and the reduction of emission standards have also had an adverse impact on the industry. Analysts believe that Tesla now needs to rely on the development of artificial intelligence technology to boost its stock price, but the development of artificial intelligence also faces challenges. Google's Waymo is far ahead of RoboTaxi, while Grok, ChatGPT and Gemini have not performed particularly well in comparison.
Tesla's stock price may be testing new resistance near the 50-day moving average. While the stock hasn't fallen significantly below this level since April, a potential Double Top pattern has now formed, and investors are looking for signs of weakening upward momentum. If the price fails to break through the 50-day moving average or the Double Top pattern, the next move is likely to be downward.
UPS (NYSE: UPS)
UPS (NYSE: UPS) may seem attractive from a valuation perspective, but the $80 billion shipping giant is lagging behind its rival FedEx. Tariff policies have impacted all transportation and delivery companies, but the elimination of the minimum exemption clause has created logistical challenges for UPS, forcing it to invest significant resources in addressing them.
UPS stock attempted a breakout in October but quickly encountered resistance near the 200-day moving average. The Simple Moving Averages (SMAs) – the 50-day and 200-day SMAs – continued to consolidate; however, this level provided continued resistance, putting further pressure on buyers. Other technical indicators also point downwards. Despite failing to break through the resistance level, the Relative Strength Index (RSI) is nearing overbought territory, and the Moving Average Convergence/Divergence (MACD) indicator shows that upward momentum is at its lowest point since August. Multiple technical resistances are generally bad news for a stock that has fallen 20% year-to-date, and this doesn't even take into account any macroeconomic pressures.
Vistra Corp Energy & Utilities (NYSE: VST)
Energy stocks, which had surged on the data center boom, are now seeing diminishing returns, with the once-energetic Vistra (NYSE: VST) appearing weak and facing an uncertain future. The company reported third-quarter 2025 earnings on November 6th, with profits significantly below expectations and revenue more than 23% lower than anticipated. As winter deepens, fluctuations in natural gas prices could put pressure on Vistra's earnings. Currently, the stock trades at a price-to-earnings ratio of 60, a price-to-book ratio of 3.3, and a price-to-book ratio of 18.
Furthermore, VST's stock chart is currently one of the worst performing among major energy companies. There are three major technical resistance levels: a break below the 50-day moving average and a bearish crossover in the MACD indicator. The Relative Strength Index (RSI) has also been declining since September, indicating that VST's momentum is waning faster than the stock price. A break below the 200-day moving average could exert significant downward pressure on the stock price.
This article, by a Benzinga analyst who says Tesla and several other stocks could be considered for a sell-off before the New Year 2026, first appeared on ABMedia .
