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As I shape my investment strategy for 2025, I’m looking for early news from the top FTSE 100 companies. Knowing how they finished 2024 and hearing their take on the next 12 months can give us a sense of how the year could go.
Supermarket leader
Tesco (LSE: TSCO) has a Christmas trading update scheduled for 9 January. In the first half, reported in October, Tesco posted a 3.5% increase in group sales. Adjusted operating profit increased by 15.6%. I didn’t like a few things, and that will improve my review when we get the next update.
Cash flow from sales decreased by 7.8%. It’s still decent, and the company puts it down to higher taxes in part. But I think we’re at a critical point where I want to see the economy strengthen.
Debt fell slightly, though only by 2.1%. Fall can be beautiful.
The board’s annual guidance stated that “retail free cash flow within our medium-term guidance range of £1.4bn to £1.8bn“. So a quarter ahead, that’s where my eyes go first.
Building back
Taylor Wimpey (LSE: TW.) delivers a trading update on 16 January. It comes ahead of FY results expected at the end of February.
The real estate business can be another bellweather for stock market sentiment. And sentiment looks mixed at the moment, as Taylor Wimpey’s share price has fallen over the past few months.
That is accompanied by an increasing likelihood that the Bank of England’s interest rate will remain high for a long time. And it includes the November 9th update we talked about “improvement in customer demand as loan rates are reduced“.
So what I’m looking for is an update on how demand has been going in the last two months of the year.
The company said “on track to deliver UK volumes in line with previous guidance and group operating profit in line with current market expectations“. We will see.
In the air
I EasyJet (LSE: EZJ) share price has been rising since the summer, ahead of Q1 results due on 22 January.
And with a forward price-to-earnings (P/E) ratio of just eight, I wonder if it might be the last to respond to any market upswing.
Forecasts show income growth. It’s only modest, but could see the P/E drop slightly if the price doesn’t rise. Airlines can be volatile at the best of times, so a low P/E doesn’t surprise me too much.
The year ended 30 September looked good enough. But it was the vision of 2025 that caught my eye. The board is looking at a 3% increase in population to around 103 million seats. That would be a metric to watch.
Stocks to watch?
I’m not sure I’ll buy any of these three in 2025, although Taylor Wimpey is the most likely.
But I rate all three as important must-watches for investors interested in their sectors, or the stock market in general. I think each can reflect market sentiment on different time scales.
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