(Bloomberg) -- Shares in British Airways-owner IAG SA and Rolls-Royce Holdings Plc rallied powerfully in 2024 to be among the best-performing UK stocks as long-haul travel demand surged.
Meanwhile, lender NatWest Group Plc marked its best year since 1993 and debutant Raspberry PI Holdings Plc provided some joy for capital markets. The benchmark FTSE 100 ended the year with an advance of 5.7%, roughly matching the pan-European Stoxx 600 Index.
Sliding in the opposite direction were posh carmaker Aston Martin Lagonda Global Holdings Plc and grocery technology group Ocado Group Plc. A slump in Vistry Group Plc accompanied three profit warnings in as many months from the homebuilder.
Below we look at some of the leaders and laggards of 2024.
Winners
IAG (+95%)
IAG has cemented its status as an analyst favorite. British Airways’ strength on North-Atlantic routes underpinned a jump in the group’s quarterly profit, while the firm continues to benefit from easing disruption around air-traffic control and deliveries of Airbus SE and Boeing Co. aircraft.
Twenty seven analysts recommend buying IAG stock, the most of any FTSE 100 member.
Rolls-Royce (+90%)
IAG wasn’t the only UK aviation stock to soar this year, as Rolls-Royce’s valuation reached £50 billion ($63 billion) for the first time. The London-based producer of engines like the Trent XWB, which powers some Airbus SE aircraft, has risen more than sixfold since the end of 2022, beating every other stock on Europe’s regional benchmark Stoxx 600 index.
Rolls-Royce’s sales have jumped thanks to a post-pandemic surge in long-haul travel. The firm said earlier this year that large-engine flying hours had finally surpassed levels seen before the Covid lockdowns.
NatWest (+83%)
UK lender NatWest is on course for its biggest annual gain since 1993 as lofty interest rates burnish earnings and the government prepares to exit a stake acquired during the global financial crisis.
Analysts at JPMorgan Chase & Co. named the stock among their top picks, citing the benefits of its fixed-income investments — known as the structural hedge — as well as an expected full privatization of the firm by mid-next year.
Still, the company formerly known as Royal Bank of Scotland Group Plc trades at only a fraction of its price before the financial crisis more than a decade and a half ago.
DS Smith (+76%)
It was a big year in the paper and packaging world after the emergence of a bidding war for DS Smith Plc.
US firm International Paper Co. agreed to buy DS Smith for £5.8 billion ($7.3 billion), besting rival suitor Mondi Plc in the battle for the UK group. The combination is set to build on a post-Covid consolidation trend in the sector after Smurfit Kappa Group Plc in 2023 agreed to acquire WestRock Co. to create an Irish-American powerhouse.
Raspberry PI (+123% since IPO)
London IPOs are rare at the moment. Even scarcer are new UK listings that perform well.
Raspberry PI shares have more than doubled since a June initial public offering as the computer maker reported a jump in sales. The trading debut was seen as a win for the London Stock Exchange, particularly after one of Raspberry PI’s own investors, Cambridge, England-based ARM Holdings Plc, chose to go public in New York.
Losers
JD Sports (-42%)
JD Sports Fashion Plc investors will hope this Christmas was better than the last. The stock tumbled in January 2024 as JD blamed unseasonable weather and cautious consumer spending for weak sales during the crucial period leading up to the festive season.
A sales slowdown at US partner Nike Inc. then weighed on the stock in the summer before JD issued another warning in November, once again blaming the elements.
Ocado (-60%)
Ocado’s stock has slumped for a third year out of the last four in the face of a stream of negative news, including Canadian partner Sobeys temporarily halting a planned launch of an automated warehouse in Vancouver. The firm lost its place in Britain’s FTSE 100 and had its credit rating downgraded by Fitch Ratings.
It’s been a brutal downfall for a stock that soared in 2018 as a deal to build warehouses and license software to US retailer Kroger Co. boosted the grocer’s credentials as a technology company. It has struggled since the pandemic-fueled boom in online shopping, falling about 90% from a 2020 peak.
Wizz Air (-35%)
Wizz Air Holdings Plc dropped after the budget airline cut its profit outlook for the year, hurt by aircraft groundings during the busy summer travel season. Wizz is among the carriers hit hardest by a more-recent engine issue that’s required its Airbus A321 aircraft to be withdrawn early for maintenance. The company said Tuesday it had reached a compensation agreement with supplier Pratt & Whitney over the engine issues.
Aston Martin (-53%)
Another year, another plunge for Aston Martin, which tapped investors for more funds in November as the luxury carmaker issued its second profit warning in two months, in part due to due to delayed deliveries of flashy Valiant models.
The British company, synonymous with the James Bond movies, was rescued by Lawrence Stroll in 2020, but the billionaire is struggling to turn things around.
Vistry (-38%)
Vistry cut its profit guidance on Christmas eve to seal a hat trick of profit warnings for the company that partners with public housing associations on affordable homes. A number of its partnerships are taking longer than expected to complete, according to the Kent-based group.
The latest warning came just weeks after Vistry was demoted from the FTSE 100 index. Its slump means Vistry now trades at less than 0.7-times its book value, indicating the company itself is worth less than the land it owns. The same could be said for most of the UK property sector, however. These stocks have tumbled anew in 2024 as optimism faded that mortgage rates would start to decline.
--With assistance from Isolde MacDonogh and Sagarika Jaisinghani.
(Adds FTSE 100’s annual performance in second paragraph and updates prices throughout.)
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