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Which FTSE 100 stocks are most likely to lead the index by the end of 2025? I believe these three have excellent potential.
BP (LSE: BP.) is currently one of the most favored FTSE 100 picks by Hargreaves Lansdown, and I understand why.
While it’s true the world must transition away from fossil fuels, and renewable energy may become the most profitable investment long-term if the right choices are made, there’s a notable shift in sentiment. Enthusiasm for alternative energy stocks seems to be waning, and there is increasing optimism that major oil companies could continue to deliver substantial profits for years to come.
BP’s Low Valuation
After experiencing a decline in 2024, BP’s share price is beginning to rise again. Why is this happening? Investors may be looking beyond the anticipated earnings dip for 2024 and toward an expected price-to-earnings (P/E) ratio of just eight for 2025.
Additionally, there’s a promising 5.6% dividend yield on the horizon.
Could Vodafone Make a Comeback?
After a 55% drop over five years, is Vodafone (LSE: VOD) poised to accelerate in 2025? I see a strong possibility.
The company’s outcomes for the fiscal year ending March 2025, which will be released in May, will be crucial. It’s widely anticipated that the dividend will be cut to half of last year’s amount.
This reduction is part of CEO Margherita Della Valle’s strategy implemented in 2023, marking 2024’s dividend as the last at the previous rate.
However, with Vodafone’s share price declining since then, the projected yield for this year has climbed to 8.5%.
We’ll See the Results
Will the full-year report reflect the results of the company’s restructuring and inspire confidence in future dividends?
This will be key to any potential resurgence for Vodafone in 2025.
Sports Recovery?
JD Sports Fashion (LSE: JD.) was among the weakest performers in the FTSE 100 in 2024, suffering a 70% loss after disappointing performance during the Christmas 2023 season.
Nonetheless, it’s begun to recover this year as we await the festive figures for 2024.
A colleague at The Motley Fool recently noted an encouraging volume of customers at JD. When I visited my local store, it was encouraging to see a good turnout.
While JD may not appear to be an exceptional buy right now, with a forward P/E of 12 and a mere 1% dividend yield following a tough year, analysts predict a decrease in P/E to about 7.3 for the fiscal year 2025-26.
Keep an Eye on Recovery
If JD appears on track to achieve these forecasts, it could even attract acquisition interest in 2025. While I wouldn’t invest solely on that speculation, it is always vital to approach forecasts with caution. Additionally, the retail sector may encounter more challenges ahead.
Nevertheless, I see JD Sports as one of the top candidates for recovery worth contemplating in 2025.
Stay Alert
Will I personally invest in any of these stocks? I’m still undecided.
I do believe they all have a solid chance of performing well in 2025, but I want to gain a clearer understanding of their potential over the next five years first.
