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By historic requirements, it’s been a reasonably good 12 months for the FTSE 100. Because the begin of 2025, the index has gained roughly a fifth. And until one thing dramatic occurs at the moment (23 December) or tomorrow, we all know who would be the Footsie’s Christmas primary.
Any guesses?
A gold star
Sure, it’s Fresnillo, the Mexican-based gold and silver producer. Its share worth has greater than trebled this 12 months. On the again of hovering metals costs – gold reached a report excessive in October – it’s been the FTSE 100’s star performer.
However I can’t see this being repeated in 2026.
Though some gold worth forecasts expect a transfer in the direction of $5,000 (presently it’s round $4,300), it’s tough to make correct predictions. There are simply too many shifting variables. And due to this 12 months’s rally, I believe the group’s share worth already displays a number of the extra optimistic forecasts. Any signal of weak spot in both gold or silver and Fresnillo’s shares might fall dramatically.
I subsequently suppose we’re going to should look elsewhere for the FTSE 100’s 2026 high performer. However who may this be?
Take your decide
To be sincere, it’s unimaginable to say. Historical past means that the most important share worth swings (up and down) are sometimes attributable to risky commodity costs.
For instance, a spike in vitality costs would make BP and Shell sturdy candidates for the 2026 Christmas high spot. Alternatively, a surge in demand for non-precious metals might assist the Footsie’s miners.
Nevertheless, there’s one inventory that has nothing to do with these sectors, that I feel could have an excellent 2026. Don’t get me fallacious, I’m not predicting a efficiency like Fresnillo’s in 2025. However I nonetheless suppose Diageo (LSE:DGE), the drinks big, is a inventory value contemplating as we head in the direction of the brand new 12 months.
Cheers!
The consensus of analysts is that its share worth is roughly 20% undervalued.
To get near this, I consider the group’s going to should persuade buyers that it’s in a position to reverse a development of falling gross sales and earnings, in a market that seems to be present process structural change. Gen Zers are ingesting lower than their dad and mom. Additionally they look like buying and selling up and shopping for dearer manufacturers, one thing the group calls “premiumisation”.
Fortuitously, Diageo’s nicely positioned to accommodate altering tastes. It has over 200 manufacturers in its portfolio – together with some iconic ones like Guinness and Smirnoff — overlaying all worth factors, together with the dearer ones. It additionally retains a very world attain and – primarily based on income — stays the world’s primary for spirits.
Nevertheless, the group’s most up-to-date buying and selling replace revealed flat gross sales and its June 2025 annual report disclosed a rise in borrowings.
Joyful New 12 months?
The duty of reversing the group’s fortunes will shortly lie with the group’s new boss, Sir Dave Lewis, who formally joins on 1 January 2026. He has a wonderful repute, which supplies me confidence that he can ship a profitable turnaround.
The following scheduled replace for buyers is in February 2026. I’m wondering if this could possibly be the catalyst for a 2026 restoration? One benefit of the falling share worth, is that consumers at the moment might take pleasure in a 4%+ dividend yield (no ensures, after all). This could present some consolation if information of the restoration I anticipate is delayed.
