19 UK stocks on list of conviction ‘buy’ ideas for 2025
There are plenty of well-known FTSE 100 names included on this list of hot stocks for the year ahead. Graeme Evans runs through this team of City analyst’s top picks.
21st January 2025 15:48
by Graeme Evans from interactive investor
Marks & Spencer, Reckitt Benckiser and RELX Group have received special attention after a City bank compiled a list of conviction buy ideas from across Europe.
The complete 2025 selection by analysts at UBS spans 58 companies, with BP (LSE:BP.), Shell (LSE:SHEL), Tesco (LSE:TSCO), Diageo (LSE:DGE), Persimmon (LSE:PSN) and Aviva (LSE:AV.) among 19 UK-listed entries.
- Invest with ii: What is a Managed ISA? | Open a Managed ISA | Transfer an ISA
Out of this, the report picks out a handful of “high-quality” domestic or international stocks that boast strong fundamental growth and positive earnings momentum.
They include the online greetings card and gifts retailer Moonpig Group Ordinary Shares (LSE:MOON), which the bank believes is at a turning point after its post-IPO underperformance due to the unwinding of Covid-era sales.
UBS highlights Moonpig’s “dominant and secure” position within a double-digit growth market, adding that the business also offers adjusted margins consistently above 20%.
The bank has a Buy rating and a base case for shares to rally by 71% to 360p.
- Why Lloyds Bank shares led FTSE 100 to fresh highs
- Stockwatch: why I’m upgrading this small-cap share
Alongside Moonpig as one of the five “high-quality” domestic names, Marks & Spencer Group (LSE:MKS) is highlighted because of its attractive value.
The shares neared 400p at the start of December but have since fallen back despite another strong trading performance in the retailer’s Christmas update.
UBS said: “We believe that the exceptional 2024-25 performance is just the start of a multi-year market outperformance story for Marks after its significant transformation of both the clothing and home and food businesses.”
The bank, which believes the shares are worth 465p. said it still sees an attractive entry point for a business that boasts clear underlying improvement in its execution.
It added that the current valuation suggested that the market is extrapolating historical underperformance into the future and “not fully pricing in a structural improvement” in M&S’s operational performance.
Among the five “high-quality” international-focused stocks, the Lexis Nexis and Elsevier publishing business RELX (LSE:REL) has been backed for more success.
The shares are at a record high near to 4,000p but the base case of UBS sees further upside to 4,600p. It highlights organic growth acceleration in the Elsevier journals operation Science, Technical and Medical, fuelled by strong growth in tools and databases.
In Legal, the bank expects sales growth to remain strong at 7% driven by continued adoption of analytics tools and demand for LexisAI+.
- Shares for the future: a top 5 stock that’s ‘absurdly cheap’
- Sign up to our free newsletter for investment ideas, latest news and award-winning analysis
RELX is trading on 29 times forecast 2025 earnings, which is slightly above the bank’s peer group on 28 times but below US rivals such as Verisk Analytics Inc (NASDAQ:VRSK) and Thomson Reuters Corp (NYSE:TRI).
Reckitt Benckiser Group (LSE:RKT) is also among the five “high-quality” international stocks, reflecting the additional benefit of its projected 4.2% dividend yield.
Having suffered a series of setbacks between February and July, the shares have rallied above 5,000p as the City warms to chief executive Kris Licht’s plan for a “sharper, simpler Reckitt”.
He aims to rebuild Reckitt around its leading high-growth consumer health and hygiene brands, which include Harpic, Durex and Strepsils.
Ongoing US litigation hangs over the stock, but UBS believes a valuation of 14 times forward earnings presents an attractive opportunity based on its price target of 7,700p.
It regards the core business as structurally superior, while it also notes compelling like-for-like sales growth prospects and Reckitt’s best-in-class operating margin and cash generation.
- Stockwatch: BP and Shell - can oil price rebound last?
- 19 financially robust companies to own in 2025
The other UK stocks on the conviction buy list are easyJet (LSE:EZJ), Imperial Brands (LSE:IMB), Land Securities Group (LSE:LAND), London Stock Exchange Group (LSE:LSEG), SSE (LSE:SSE), ConvaTec Group (LSE:CTEC), Intermediate Capital Group (LSE:ICG), Intertek Group (LSE:ITRK) and Wise Class A (LSE:WISE).
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.