Today I am considering the investment case for three FTSE 100 (INDEXFTSE: UKX) giants.

Supermarket strains

The competitive pressures battering established grocers like Sainsbury’s (LSE: SBRY) is hardly a secret. Indeed, the rising presence of Aldi and Lidl on high streets and retail parks across the country is testament to the rising troubles facing the ‘Big Four’ supermarkets.

Still, many would argue that the risks to Sainsbury’s long-term earnings outlook is currently baked into the share price, leaving plenty of upside for optimistic investors.

The London supermarket currently deals on a forward P/E rating of 11.6 times for the year to March 2016, just above the benchmark of 10 times indicative of high-risk stocks.

But I believe Sainsbury’s remains a gamble too far, even at current prices. Excluding fuel, the supermarket saw like-for-like sales slip 0.4% during the three months to June 4th, it advised this week.

And chief executive Mike Coupe warned that “food price deflation continues to impact our sales and pressures on pricing mean the market will remain competitive for the foreseeable future.”

I believe Sainsbury’s has much more work to achieve before it can be considered a sound stock choice, particularly as its rivals aggressively expand their physical and online propositions.

Out of fashion

Like Sainsbury’s, clothing giant Next (LSE: NXT) is also finding itself at the mercy of rising competition.

The retailer’s Next Directory catalogue and online division has seen customers numbers slip in recent times as its sector rivals steadily ramp up their own internet services.

As a result, group sales slumped 0.9% between February and April, forcing the firm to cut its estimates for the year to March 2017 — revenues are now expected to range between a 3.5% fall and a 3.5% rise.

The togs vendor had previously advised that “the year ahead may well be the toughest we have faced since 2008,” adding that “it may well feel like walking up the down escalator, with a great deal of effort required to stand still.” And I believe Next’s difficulties could extend well beyond this period.

So like Sainsbury’s, I reckon the risks far outweigh the potential rewards, despite a similarly-low forward P/E ratio of 12.3 times.

Lighting up

I am far more bullish over the long-term earnings outlook of British American Tobacco (LSE: BATS), however, and believe the firm is a far more attractive stock pick despite a higher prospective P/E rating of 18.1 times.

That is not to say that ‘Big Tobacco’ isn’t without its fair share of problems. Indeed, rising regulatory hurdles — such as the introduction of plain packaging wheeled out in Britain last month — is exacerbating the rising unpopularity of smoking.

Although total cigarette volumes are subsequently falling, the unrivalled brand power of British American Tobacco’s Lucky Strike and Pall Mall cartons are enabling it to hurdle this problem. Indeed, sales of these ‘Global Drive Brands’ leapt 10.5% during January-March as their collective market share rose.

And with British American Tobacco investing heavily in these labels, not to mention improving its product range in the white-hot e-cigarette market, I reckon the future remains bright for the tobacco titan.

Enjoy smoking returns!

But whether or not you share my take on British American Tobacco et al, and are looking to significantly boost your investment returns elsewhere, I strongly recommend you check out this special Fool report that could help you become a market millionaire!

The Motley Fool's 10 Steps To Making A Million In The Market report reveals a cluster of fast-growth small-caps and beaten-down bargains we believe should produce ten-fold returns.

Click here to enjoy this exclusive 'wealth report.' It's 100% free and can be sent straight to your inbox!

Royston Wild has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.