Stock markets have been rising this year, but the gains have not been equal. While many stocks are in the process of recovering, others continue to fall or trade sideways. Somewhat surprisingly, many blue-chip stocks that have been consistent outperformers over the past decade are now lagging the market. These are companies that are household names and familiar to people in their daily lives. For a variety of internal and external reasons, many once much-loved stocks have now fallen out of favor with both professional traders and retail investors. For many of these stocks, their future prospects seem bleak, and the investors who own these names should sell them now. Here is a list of sorry blue-chip stocks to sell in April before it’s too late.
JPMorgan Chase (JPM)
These are dark days for the banking sector after the failure of two mid-sized regional banks in the U.S. and the demise of European giant Credit Suisse (NYSE:CS).
While the largest U.S. lenders have been immune from the banking crisis, their stock prices have fallen in sympathy with the entire sector. Case in point is JPMorgan Chase (NYSE:JPM). The biggest U.S. bank’s only involvement in the crisis was to orchestrate a $30 billion rescue of troubled regional lender First Republic (NYSE:FRC). Yet JPM stock is down 10% in the last month.
Perhaps making matters worse, JPMorgan CEO Jamie Dimon just warned that, in his opinion, the banking crisis is not yet over, and that there could be more turmoil ahead for the sector.
In his annual letter to shareholders, Dimon wrote: “The current crisis is not yet over, and even when it is behind us, there will be repercussions from it for years to come.”
The gloomy letter seemed to further dampen the already poor sentiment surrounding bank stocks. While JPM stock remains a solid blue-chip name, now does not appear to be the time to invest in it or even own its shares.
Sneaker giant Nike (NYSE:NKE) can’t seem to get its act together in China, and that issue continues to hurt the company’s share price. The company just released rock-solid quarterly results that beat analysts’ mean estimates on the top and bottom lines. But news of sluggish sales in China seemed to be all the media focused on coming out the company’s latest earnings print. As a result, NKE stock is up a tepid 1% this year but is 30% lower than the peak of $167 a share that it reached in October 2021.
Nike reported earnings per share (EPS) of 79 cents versus the average estimate of 55 cents. Nike’s revenue of $12.39 billion also beat the average outlook of $11.47 billion.
But NKE stock barely budged despite the earnings beat. News that the company’s sales in China, its third-biggest market by revenue, had dropped 8% year-over-year cast a cloud over what was otherwise a stellar print.
China’s zero-COVID-19 policy has weighed heavily on Nike’s operations for several years now. With China remaining unpredictable, it might be time to sell Nike stock.
Things just haven’t been the same at e-commerce giant Amazon (NASDAQ:AMZN) since founder Jeff Bezos left to pump iron and build his super yacht. After grossly overbuilding and over hiring during the pandemic, Amazon has been forced into a full-blown retrenchment over the past year. Its fulfillment centers are being closed, its projects shelved, and more than 25,000 of the conglomerate’s employees have been let go.
AMZN’s earnings have consistently missed analysts’ average expectations after years of outperformance, and the stock has become a laggard in the technology sector.
While other tech stocks have come roaring back this year, Amazon has not been part of the recovery. Nvidia (NASDAQ:NVDA) stock, for example, has risen 11% in the last year. AMZN stock has fallen 36% in the same period.
Shareholders are starting to get restless with the subpar performance after years of steady and consistent growth. Some are calling for current Amazon CEO Andy Jassy to step down and for Bezos to return to the helm, much as Bob Iger returned to Disney (NYSE:DIS) last year.
But at this point, Amazon has become one of sorry blue-chip stocks to sell in April.
Pharmaceutical company Moderna (NASDAQ:MRNA) was a darling of the Covid-19 pandemic when it developed one of the first vaccines approved for use by the Food and Drug Administration (FDA). My, how things have changed. After peaking at $450 a share in September 2021, MRNA stock has tumbled to $155 today. This despite the fact that the company sold $18.4 billion worth of Covid-19 vaccines in 2022.
Moderna’s main problem is its pipeline, or lack thereof. Its Covid-19 vaccine, which uses the company’s patented mRNA technology, was the first product to be successfully commercialized by Moderna. Unlike competing pharmaceutical firms, Moderna does not have a stable of blockbuster drugs to count on.
Moreover, its Covid-19 vaccine is its only approved medication, and sales are expected to slow this year. While the company has multiple new drugs in development, until they come to market, MRNA stock looks likely to remain depressed.
Walt Disney Co. (DIS)
How long should you wait for Disney to turn itself around? Sure, Bob Iger has become its CEO again . And yes, the company might sell its Hulu streaming platform.
But is that going to be enough to raise the share price, which remains nearly 30% below where it was trading at 12 months ago? Disney faces a number of issues right now, including bloated costs, declining subscriptions to its Disney+ streaming service, a movie industry and theme parks that are still emerging from pandemic shutdowns, and a share price that can’t seem to break above $100.
To his credit, Bob Iger has been moving quickly to right the ship at Disney. He successfully fended off an attack by activist shareholders after promising to control costs and reinstate the company’s dividend that was suspended during the pandemic.
Going forward, Iger will have to make Disney a leaner, meaner profit machine. That won’t be easy, especially in light of its declining advertising revenue.
In Disney’s most recent, reported quarter, the operating profit of its traditional television business declined 16% year-over-year to $1.3 billion. And while the subscription losses of Disney+ have slowed, the streaming service is not yet profitable.
Verizon Communications (VZ)
You’d think that with the rollout of fifth generation (5G) internet by Verizon Communications (NYSE:VZ) , VZ stock would be performing better. But that’s not the cast.
The largest wireless carrier in the U.S. with more than 140 million subscribers, continues to woefully underperform, making it a sorry blue-chip stock to sell in April.
Over the past 12 months, VZ stock has declined 25%, including a 2% drop so far in 2023. Even a quarterly dividend that yields nearly 7% has not been enough to rouse investor interest in the shares.
The problem for Verizon is its subpar earnings. The company seems to prioritize growth over profits. Verizon’s earnings per share have declined an average of 7.2% a year over the last five years, giving many investors pause about buying its shares.
The company’s most recent print met analysts’ expectations for earnings and revenue, but just barely. The company declined to provide guidance for 2023, further eroding confidence in its management and path forward. Until Verizon starts beating earnings forecasts, VZ stock looks likely to remain stuck in neutral.
Looking at a chart of retailer Walmart’s (NYSE:WMT) stock, the word “stagnant” comes to mind. Over the last 12 months, WMT stock is down a slight 4.5%. So far this year, the company’s share price is up 3%. Looking back further, Walmart’s stock today is trading at the same level it was at back in the autumn 2020. The stock hasn’t moved much either up or down for more than two years now.
That’s kind of sad considering Walmart’s continued expansion, move into groceries, and the development of its online store. The e-commerce side of Walmart’s business has grown substantially since the pandemic took hold, with a recently redesigned website garnering critical praise. And unlike other companies, Walmart hasn’t had to significantly scale down its growth.
The company recently announced that it was laying off 2,000 warehouse workers, but that’s a fraction of its global workforce of more than 2 million employees.
But the company and WMT stock seem to be in a malaise. Walmart most recently reported strong fourth-quarter earnings. But the retailer also issued meek forward guidance that left analysts and investors feeling somewhat indifferent about the year ahead.
On the date of publication, Joel Baglole held long positions in NVDA and DIS. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.