Ryan Hogg suggests three FTSE 100 stocks that offer a profit of over 2% and are expected to experience positive growth in 2023. The mid-February performance of the FTSE 100 has been impressive, with the UK avoiding a recession and price drops.
Meanwhile, the US is adopting a hawkish turn based on analysis ratings and company policies. This hawkish sentiment presents an opportunity for FTSE 100 stocks to yield significant price gains in 2023.
Lloyds
One of the top three FTSE 100 stocks is Lloyds. Bank stocks have had a healthy year with increasing interest rates and high demand, resulting in a 14% jump in shares from the start of 2022.
The future looks promising for Lloyds, and if they begin to struggle, a drop in housing demand will lead to mortgage rate drops. Recently, Barclay’s bank experienced a 40% increase, with shares rising to 75p. Jefferies upgraded the bank to 77p, making it Credit Suisse’s top pick.
However, the bank’s condition could easily turn sour, especially when housing prices drop or interest rates rise, leading to loan repayment difficulties. The predicted dividend for Lloyds in 2023 is 5.9%, above the Footsie annual prediction of a 3.5% increase.
Tesco
Tesco, the FTSE sales giant, has witnessed a remarkable share rise of 7.5 percent over the past two months, creating a potentially profitable investment opportunity. This rise is a positive turn of events for the company, which underwent a 25 percent fall in shares in 2022, causing Tesco to reduce its share prices, resulting in a perceived cheap valuation.
Despite a price-to-earnings (P/E) the ratio of 11.3 being slightly low for the consumer sector, which trends at around 14, it is still below the FTSE 100 average of 13.9 as of December.
Tesco’s growth in the previous year was due to the company’s ability to share increased costs with its customers, even during tough times. As inflation rises, the UK is expected to evade a recession, which may keep households from feeling the pinch as they should. However, if the household income falls further, the result may be an increased weight on Tesco’s shares.
Despite some potential challenges, Tesco’s recent share rise makes it an attractive option for investment, particularly given its reputation as a reliable and established company.
AstraZeneca
Pharmaceutical giant AstraZeneca has had a positive start to the year, despite most FTSE 100 stocks already reaching record-high profits. Over the past five years, AstraZeneca has tripled its costs, making it the second-largest company in the FTSE 100.
While there has been a slight drop of 0.3 percent, the company is expected to enter a period of rapid growth until 2025, which could boost earnings to $3.06 per share. Investors are eagerly searching for weak spots in the market, and these FTSE 100 giants present a promising opportunity.