Is 2024’s biggest FTSE faller now the best share to buy for 2025?

Harvey Jones thought this FTSE 100 growth stock was the best share to buy for 2024, but was wrong. Yet he remains optimistic about its prospects for the year ahead.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Runner standing at the starting point with 2025 year for starting in new year 2025 to achieve business planing and success concept.

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

When I bought sportswear and trainers specialist JD Sports Fashion (LSE: JD) on 22 January, I thought it looked like the very best share to buy for the year ahead.

This was a brilliant growth stock that had been bombing along for years, but had just sold off after a tough Christmas trading period. The board had issued a profit warning, and this allowed me to grab it at a discounted price.

Then all I had to do was sit back and wait for the cost-of-living crisis to ease. When the outlook brightened and shoppers started splashing cash on trainers again, the JD Sports share price would race out of the blocks. That was my reasoning. It was wrong.

Should you invest £1,000 in JD Sports right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if JD Sports made the list?

See the 6 stocks

Instead of being one of the best-performing shares on the FTSE 100 over the last 12 months, it’s turned out to be the very worst of all.

I called JD Sports shares completely wrong

JD shares have lost almost half their value in that time, plunging by 43.75%. That’s worse than B&M European Value (down 34.39%) and Mike Ashley’s Frasers Group (down 36.77%). The fact that all three are in the retail sector tells us something.

Created with Highcharts 11.4.3JD Sports Fashion PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

Having bought after the original profit warning and share price dip, I haven’t done as badly as some. Personally, my stake in JD Sports is down 16.1%. It’s still not ideal.

I’m saying all this as a warning. I think the 2025 outlook for JD Sports is much, much brighter, but I’ve been wrong before.

The group has been hit by forces largely beyond its control. ‘Higher for longer’ interest rates, the consumer slowdown, problems at key partner Nike, Budget hikes to employer’s National Insurance, and now President-elect Donald Trump’s trade tariff threats.

Its shares had been fighting back. But they slumped 15% on 21 November after the board was forced to issue another profit warning. It blamed a volatile October, amid widespread discounting, milder weather and consumer caution ahead of the US election.

I’m sticking by my upbeat forecast

With markets falling across the board after the US Federal Reserve warned it would slow interest rate cuts next year, there’s no respite.

Yet with a price-to-earnings ratio of exactly 8, I think JD Sports shares look nicely valued. And I’m clearly not the only one.

The 15 analysts offering one-year share price forecasts have produced a median target of 157.34p. If correct, that’s an increase of a thumping 63.01% from today. Forecasts aren’t guaranteed of course, but that fills me with Christmas cheer. JD Sports may not be very best FTSE 100 share for anyone to consider buying for 2025. But I think it’s not far off.

I believe 2025 will be bumpy. In fact, I’ve been pleased by the recent sell-off, as it skims off some of the froth that built up after the ‘Trump bump’. Investors will no doubt spend too much time looking at interest rate forecasts. But give today’s gloom, even a modest three rate cuts next year might be well received.

Even if I’m wrong, at today’s price, the JD sports share price looks like a screaming buy for me. The only problem is that I’d buy more but I already have an outsized stake in its fortunes.

5 stocks for trying to build wealth after 50

The cost of living crisis shows no signs of slowing… the conflict in the Middle East and Ukraine shows no sign of resolution, while the global economy could be teetering on the brink of recession.

Whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times. Yet despite the stock market’s recent gains, we think many shares still trade at a discount to their true value.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. We believe these stocks could be a great fit for any well-diversified portfolio with the goal of building wealth in your 50’s.

Claim your free copy now

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Harvey Jones has positions in JD Sports Fashion. The Motley Fool UK has recommended B&M European Value. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

piggy bank, searching with binoculars
Investing Articles

Genus rockets 27% in the FTSE 250! Should I buy this UK stock?

Our writer has had this under-the-radar UK stock on his watchlist for a few months now. Why did it suddenly…

Read more »

Aston Martin DBX - rear pic of trunk
Investing Articles

Down 83%, might the Aston Martin share still be a value trap?

The Aston Martin share price has been weak for years. With free cash flow forecast later this year, could it…

Read more »

Investor looking at stock graph on a tablet with their finger hovering over the Buy button
Investing Articles

3 cheap UK shares to consider buying in May

The raft of reports from UK shares in April continues into May. Here are three stocks I think could benefit…

Read more »

Tesla building with tesla logo and two teslas in front
Investing Articles

Could buying Tesla shares this May be a long-term masterstroke?

Christopher Ruane stills sees a lot to like about Tesla's car business -- and potential in some other areas. So…

Read more »

4 Teslas in a parking lot at a charger station
US Stock

Investors buying Tesla stock today face these risks

Tesla stock has crashed by almost half since its record high last December. But with more trouble on the horizon,…

Read more »

British flag, Big Ben, Houses of Parliament and British flag composition
Investing Articles

2 depressed UK shares I’m considering buying in May and holding ‘forever’

Our writer has been looking for bargain UK shares to snap up while they're 'on sale'. These two are definitely…

Read more »

Storytelling image of a multiethnic senior couple in love - Elderly married couple dating outdoors, love emotions and feelings
Investing Articles

If this 12-month Rolls-Royce share price forecast is correct then I’ll be a happy investor

The Rolls-Royce share price is red hot but Harvey Jones accepts it cannot keep rocketing at recent rates. Investors need…

Read more »

Exterior of BT head office - One Braham, London
Investing Articles

4 reasons I’m avoiding surging BT shares in 2025

Despite being impressed with the recent performance of BT shares, this investor has no intention of buying any today. Here's…

Read more »