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Five Stocks You Might Want to Avoid Heading Into the New Year

MarketDash Editorial Team
2 days ago
As 2025 winds down, not every major stock has been a winner. From Target's retail struggles to Tesla's valuation concerns, here are five names facing serious headwinds worth reconsidering before the calendar flips to 2026.

December is traditionally when investors take stock of their portfolios and consider some housekeeping. Tax-loss harvesting season is upon us, and while 2025 has rewarded patient investors in many cases, not every large-cap name has enjoyed prosperity this year.

So as the holiday season approaches and everyone's making lists and checking them twice, here are five stocks you might want to consider dropping or avoiding before we flip the calendar to 2026.

Target Keeps Missing the Mark

Target Inc. (TGT) has had a genuinely rough year. Despite consumer spending holding up reasonably well across the retail sector, Target stands out as one of the few major retailers consistently disappointing expectations. Both the fundamental story and the technical picture look pretty grim, and there's no obvious floor in sight for the struggling retailer.

Sure, the stock trades at just 11 times earnings and 0.39 times sales, which looks cheap on paper. But there's a reason for those bargain-bin valuations. The company is floundering amid terrible earnings and serious margin pressures. In its fiscal Q3 2026 report, Target revealed comp sales dropped 2.7%, and management slashed full-year 2025 EPS guidance down to just $7 to $8 per share. Following the November 19th conference call, analysts weren't exactly rushing to defend the stock—11 price reductions versus only two price target increases tells you everything you need to know about Wall Street's sentiment.

The reality is that Walmart has clearly emerged as the winner for value-conscious consumers this year, and the stock performance of both companies reflects that shift dramatically.

The chart doesn't offer much optimism for the near term either. The stock has been trending consistently downward since the broader market started rolling over in February. The 50-day simple moving average has flipped from acting as support to becoming resistance, which is never a good sign. Even more concerning, shares don't catch a bid when the Relative Strength Index dips into oversold territory—usually a reliable signal that brings in bullish buyers and algorithmic trading. This holiday season isn't shaping up to be very merry for Target shareholders.

Deere Faces a Perfect Storm

Few large-cap stocks have taken a bigger hit from Trump's trade war than Deere and Co. (DE), the $130 billion market cap farm equipment giant that manufactures tractors, harvesters, planters, and other precision machinery. Despite actually beating both revenue and EPS estimates in its fiscal Q4 2025 earnings release, the company provided remarkably muted guidance due to an anticipated 2026 tariff headwind exceeding $1.2 billion before taxes.

Add to that the farming crisis brewing across the American Midwest, and Deere is staring down multiple serious sales headwinds as we enter 2026.

The stock tried to mount a rally over the past six weeks, but momentum already appears to be evaporating. Following the Death Cross formation earlier, the 200-day SMA has established itself as a formidable resistance level, keeping the share price trapped below the gap-down level from the company's fiscal Q3 2025 earnings release back in August. Another warning sign comes from the MACD indicator, which is trending downward again after nearly two months of upward movement.

Simply put, Deere faces too many structural headwinds heading into 2026 to make it a compelling buy right now.

Tesla's Valuation and Volatility Problem

Betting against Elon Musk's cult of personality is always a risky proposition, but the volatile automaker's stock is being volatile again—shocking, I know—and this time there are several fundamental concerns creating real problems. First up, as always, is the valuation question. Tesla Inc. (TSLA) currently trades at more than 300 times earnings, 15 times sales, and over 200 times free cash flow. Those aren't typos.

Vehicle sales continue cratering in Europe, and BYD is breathing down Tesla's neck in China. In the United States, the expiration of the EV tax credit combined with relaxed emission standards create additional headwinds for the automotive business. The company is leaning increasingly hard on AI advances to prop up its stock price, but there are challenges on that front too. Google's Waymo is substantially ahead of Tesla's RoboTaxi ambitions, and the AI chatbot Grok remains a distant also-ran compared to ChatGPT and Gemini.

The chart suggests TSLA shares could be running into a new resistance level at the 50-day SMA. The stock hadn't made any meaningful dip below this level since April, but now that a potential double-top pattern has formed, investors are watching closely for signs of weakening momentum. If shares can't break through the 50-day SMA or overcome the double top formation, the next move is likely heading downward.

UPS Losing Ground to FedEx

United Parcel Service Inc. (UPS) might look attractive based purely on valuation, but the $80 billion shipping giant is falling behind rival FedEx in meaningful ways. Tariff policy has created headaches for all shipping and delivery companies, but the removal of the de minimis exception has spawned a logistical nightmare that UPS has been forced to dedicate substantial resources toward untangling.

Dependence on Amazon represents another significant headwind. Volume from the e-commerce behemoth dropped over 21% in Q3, and the company offered decidedly tepid guidance despite beating on both the top and bottom lines in earnings.

The stock tried to break out in October but quickly ran into resistance along the 200-day SMA. The 50-day and 200-day SMAs continue consolidating, but the repeated rejection at this level increases pressure on buyers. Other technical signals also point downward. The RSI is approaching overbought territory despite the stock failing to break above resistance, which is a red flag. The MACD shows bullish momentum at its weakest point since August.

Multiple technical headwinds are rarely good news for a stock already down 20% year-to-date, and that's before you factor in any macroeconomic pressures that might emerge.

Vistra's Data Center Buzz Fading

Energy stocks received a substantial boost from the data center gold rush, but those returns are starting to diminish. The once-vibrant Vistra Corp. (VST) is now looking sluggish and concerning. The company reported a stark earnings miss for Q3 2025 on November 6th, missing revenue projections by more than 23%. That's not a minor shortfall.

Volatile natural gas prices will likely continue weighing on Vistra's bottom line throughout the winter, and the stock now trades at 60 times earnings, 3.3 times sales, and 18 times book value. Those aren't exactly bargain valuations.

Additionally, VST has one of the uglier charts you're likely to encounter among large-cap energy companies right now. A trio of technical headwinds is currently visible, including a drop below the 50-day SMA and a bearish MACD crossover. The RSI has also been trending downward since September, suggesting that momentum is fading even faster than the share price itself.

A plunge below the 200-day SMA would likely trigger significant downward pressure on the share price, so this key level deserves close attention over the next few trading sessions.

Back to News

Five Stocks You Might Want to Avoid Heading Into the New Year

MarketDash Editorial Team
2 days ago
As 2025 winds down, not every major stock has been a winner. From Target's retail struggles to Tesla's valuation concerns, here are five names facing serious headwinds worth reconsidering before the calendar flips to 2026.

December is traditionally when investors take stock of their portfolios and consider some housekeeping. Tax-loss harvesting season is upon us, and while 2025 has rewarded patient investors in many cases, not every large-cap name has enjoyed prosperity this year.

So as the holiday season approaches and everyone's making lists and checking them twice, here are five stocks you might want to consider dropping or avoiding before we flip the calendar to 2026.

Target Keeps Missing the Mark

Target Inc. (TGT) has had a genuinely rough year. Despite consumer spending holding up reasonably well across the retail sector, Target stands out as one of the few major retailers consistently disappointing expectations. Both the fundamental story and the technical picture look pretty grim, and there's no obvious floor in sight for the struggling retailer.

Sure, the stock trades at just 11 times earnings and 0.39 times sales, which looks cheap on paper. But there's a reason for those bargain-bin valuations. The company is floundering amid terrible earnings and serious margin pressures. In its fiscal Q3 2026 report, Target revealed comp sales dropped 2.7%, and management slashed full-year 2025 EPS guidance down to just $7 to $8 per share. Following the November 19th conference call, analysts weren't exactly rushing to defend the stock—11 price reductions versus only two price target increases tells you everything you need to know about Wall Street's sentiment.

The reality is that Walmart has clearly emerged as the winner for value-conscious consumers this year, and the stock performance of both companies reflects that shift dramatically.

The chart doesn't offer much optimism for the near term either. The stock has been trending consistently downward since the broader market started rolling over in February. The 50-day simple moving average has flipped from acting as support to becoming resistance, which is never a good sign. Even more concerning, shares don't catch a bid when the Relative Strength Index dips into oversold territory—usually a reliable signal that brings in bullish buyers and algorithmic trading. This holiday season isn't shaping up to be very merry for Target shareholders.

Deere Faces a Perfect Storm

Few large-cap stocks have taken a bigger hit from Trump's trade war than Deere and Co. (DE), the $130 billion market cap farm equipment giant that manufactures tractors, harvesters, planters, and other precision machinery. Despite actually beating both revenue and EPS estimates in its fiscal Q4 2025 earnings release, the company provided remarkably muted guidance due to an anticipated 2026 tariff headwind exceeding $1.2 billion before taxes.

Add to that the farming crisis brewing across the American Midwest, and Deere is staring down multiple serious sales headwinds as we enter 2026.

The stock tried to mount a rally over the past six weeks, but momentum already appears to be evaporating. Following the Death Cross formation earlier, the 200-day SMA has established itself as a formidable resistance level, keeping the share price trapped below the gap-down level from the company's fiscal Q3 2025 earnings release back in August. Another warning sign comes from the MACD indicator, which is trending downward again after nearly two months of upward movement.

Simply put, Deere faces too many structural headwinds heading into 2026 to make it a compelling buy right now.

Tesla's Valuation and Volatility Problem

Betting against Elon Musk's cult of personality is always a risky proposition, but the volatile automaker's stock is being volatile again—shocking, I know—and this time there are several fundamental concerns creating real problems. First up, as always, is the valuation question. Tesla Inc. (TSLA) currently trades at more than 300 times earnings, 15 times sales, and over 200 times free cash flow. Those aren't typos.

Vehicle sales continue cratering in Europe, and BYD is breathing down Tesla's neck in China. In the United States, the expiration of the EV tax credit combined with relaxed emission standards create additional headwinds for the automotive business. The company is leaning increasingly hard on AI advances to prop up its stock price, but there are challenges on that front too. Google's Waymo is substantially ahead of Tesla's RoboTaxi ambitions, and the AI chatbot Grok remains a distant also-ran compared to ChatGPT and Gemini.

The chart suggests TSLA shares could be running into a new resistance level at the 50-day SMA. The stock hadn't made any meaningful dip below this level since April, but now that a potential double-top pattern has formed, investors are watching closely for signs of weakening momentum. If shares can't break through the 50-day SMA or overcome the double top formation, the next move is likely heading downward.

UPS Losing Ground to FedEx

United Parcel Service Inc. (UPS) might look attractive based purely on valuation, but the $80 billion shipping giant is falling behind rival FedEx in meaningful ways. Tariff policy has created headaches for all shipping and delivery companies, but the removal of the de minimis exception has spawned a logistical nightmare that UPS has been forced to dedicate substantial resources toward untangling.

Dependence on Amazon represents another significant headwind. Volume from the e-commerce behemoth dropped over 21% in Q3, and the company offered decidedly tepid guidance despite beating on both the top and bottom lines in earnings.

The stock tried to break out in October but quickly ran into resistance along the 200-day SMA. The 50-day and 200-day SMAs continue consolidating, but the repeated rejection at this level increases pressure on buyers. Other technical signals also point downward. The RSI is approaching overbought territory despite the stock failing to break above resistance, which is a red flag. The MACD shows bullish momentum at its weakest point since August.

Multiple technical headwinds are rarely good news for a stock already down 20% year-to-date, and that's before you factor in any macroeconomic pressures that might emerge.

Vistra's Data Center Buzz Fading

Energy stocks received a substantial boost from the data center gold rush, but those returns are starting to diminish. The once-vibrant Vistra Corp. (VST) is now looking sluggish and concerning. The company reported a stark earnings miss for Q3 2025 on November 6th, missing revenue projections by more than 23%. That's not a minor shortfall.

Volatile natural gas prices will likely continue weighing on Vistra's bottom line throughout the winter, and the stock now trades at 60 times earnings, 3.3 times sales, and 18 times book value. Those aren't exactly bargain valuations.

Additionally, VST has one of the uglier charts you're likely to encounter among large-cap energy companies right now. A trio of technical headwinds is currently visible, including a drop below the 50-day SMA and a bearish MACD crossover. The RSI has also been trending downward since September, suggesting that momentum is fading even faster than the share price itself.

A plunge below the 200-day SMA would likely trigger significant downward pressure on the share price, so this key level deserves close attention over the next few trading sessions.

    Five Stocks You Might Want to Avoid Heading Into the New Year - MarketDash News