FTSE 100’s best and worst shares of 2024
The banking, airline and tobacco sectors delivered for FTSE 100 investors in 2024, but there were contrasting fortunes for those with retail names in their portfolio.
24th December 2024 11:01
by Graeme Evans from interactive investor
Rolls-Royce shareholders are toasting another stunning year after the resurgent engines maker rallied by another 93% on top of the FTSE 100-leading 222% advance of 2023.
The shares were less than 100p in early 2023, when newly appointed chief executive Tufan Erginbilgic likened the business to a “burning platform”.
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His focus on cost efficiencies and commercial optimisation mean profit and cash flow targets set for 2027 are already within reach, while dividends are now in the pipeline for 2025.
A December price of 578p valued Rolls-Royce Holdings (LSE:RR.) at nearly £50 billion as the 12th-largest stock in the FTSE 100, but with plenty of City analysts pointing to a place in the top 10 during 2025.
British Airways owner International Consolidated Airlines Group SA (LSE:IAG), whose September dividend payment left Rolls as the only pandemic-era FTSE 100 stock yet to resume distributions, had an equally strong year.
The shares jumped 94% as self-help measures and favourable conditions helped it outperform rivals Deutsche Lufthansa AG (XETRA:LHA) and Air France-KLM (EURONEXT:AF) fell by a considerable margin.
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A strong December meant the group finished the year with a foothold above 300p and a valuation of £14.6 billion, still short of the 400p that shares were trading before the pandemic.
In banking, NatWest Group (LSE:NWG) and Barclays (LSE:BARC) were the pick of the sector after their shares followed 2023’s weaker performances with rebounds in the region of 81% and 68% respectively.
Unlike Lloyds Banking Group (LSE:LLOY), which is up by a more modest 12% in the year, NatWest hasn’t been blighted by uncertainty caused by a potential motor finance compensation bill.
A resilient UK economy and the use of structural hedges, which protect against interest rate volatility, have bolstered NatWest’s performance. An all-in yield of 12% and the unwinding of the Treasury’s stake are other factors in the re-rating of the shares.
The US exposure of Barclays, particularly investment banking, and early signs of progress in the three-year plan of boss C.S. Venkatakrishnan has also benefited shareholders.
Like Barclays, Standard Chartered (LSE:STAN) has traded at a nine-year high during 2024 after the Asia-focused lender rose in value by about 45%. The progress followed moves by chief executive Bill Winters to simplify the business and to focus on higher quality growth.
A summer re-rating caused by Europe’s preference for defensives over cyclicals helped income stocks British American Tobacco ADR (NYSE:BTI) and Imperial Brands (LSE:IMB) feature among the FTSE 100’s top stocks, having fallen sharply in 2023.
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Imperial led the way, rising to a five-year high in November after results included plans to return over 13% of its market value to shareholders in the current financial year.
Revenues growth at British American Tobacco accelerated in the second half, while the group has also committed to a higher level of shareholder returns including buybacks.
London Stock Exchange Group (LSE:LSEG) closed the year near a record high after a rise of more than 20%, fuelled by strong momentum in its largest division of Data and Analytics and the potential of the partnership forged two years ago with the tech giant Microsoft.
The year was also a profitable one for holders of three heavyweights of the retail sector - Marks & Spencer Group (LSE:MKS), Next (LSE:NXT) and Tesco (LSE:TSCO).
The supermarket’s rise of about 27% followed its latest market share gains and the return of a more normal operating environment after inflationary pressures eased.
A series of profit upgrades by Next were driven by its progress overseas and online as its valuation built on 2023’s 40% improvement to set a record high during the year.
Marks & Spencer shares are up by 300% since October 2022 as the food, home and clothing retailer won back more consumers through new-look stores and improved ranges.
A recent presentation to City investors highlighted opportunities for further sales and margin momentum, particularly in relation to advances in technology and the supply chain.
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The shares touched 400p at one point in December, only to fall back amid industry-wide worries over the sharply higher employment costs in the Budget.
The headwinds facing the industry were highlighted at the foot of the FTSE 100 index after JD Sports Fashion (LSE:JD.) and B&M European Value Retail SA (LSE:BME)l fell by close to 40%.
The sportswear chain’s year started badly with a post-Christmas downgrade before it was hit by unseasonal weather and the impact of the US election towards the end of the period.
Pressure on discount retailer B&M intensified in the summer after a disappointing first quarter of the financial year saw UK like-for-like sales decline 3.5% against tough comparatives.
As well as fragile consumer confidence, sentiment has been impacted by rising costs and the retirement of another key director in the group’s growth journey.
Twenty stocks lost a fifth or more of their value in 2024, including the mining heavyweights Glencore (LSE:GLEN) and Rio Tinto Registered Shares (LSE:RIO). A weaker iron ore price due in part to uncertainty over China demand impacted Rio, while the absence of top-up shareholder returns in the wake of a major steelmaking coal acquisition has sapped Glencore interest.
Housebuilders were among 2023’s strongest performers, only to retreat in the second part of this year as it became apparent that borrowing costs will take longer to fall. The industry is also facing renewed cost and regulatory headwinds.
Newly created Barratt Redrow (LSE:BTRW) and Berkeley Group Holdings (The) (LSE:BKG) fell by more than a fifth in 2024, despite the support of the new government's house building targets. Vistry Group (LSE:VTY) lost its place in the FTSE 100 after the disclosure of overly optimistic cost assumptions in one of its divisions.
Croda International (LSE:CRDA) ranked among the biggest fallers for a second year running, with the speciality chemicals firm at a seven-year low after a period of customer de-stocking.
There was also more disappointment for the shareholders of Asia-focused insurer Prudential (LSE:PRU) as the China economy’s lacklustre performance offset a new $2 billion share buyback plan.
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