The year 2024 has been a good year for the FTSE 100 index, with six of the last eight months registering profits. Impressively, that happened in the era of high interest rates, and with the UK economy struggling to return to the growth path. However, concerns over the US economy have sent a FUD contagion across global equities markets in recent weeks, and much now depends on the Fed’s interest rate decision in mid-September.
That said, I believe that some stocks have developed strong foundations to stay on the growth path in the second half of the year. Below, we look at Barclays, Darktrace and Rolls Royce share price performances and tell you why they are among the best FTSE 100 stocks in 2024:
Barclays Bank share price has risen by 45.5 percent year-to-date and is up by 5.5 percent in the last month, on the back of impressive earnings. The bank’s equities income rose by 24 percent in the second quarter, beating giants like JP Morgan (+21%), Morgan Stanley (18%) and Goldman Sachs (+7%) in the wider equities markets, fueled by the prime brokerage sector.
In early August, it announced a $950 mln share buyback program, underlining a strong growth outlook. That is part of a £ 10 billion it plans to return to shareholders in the next two years. Elsewhere, the UK housing sector has shown signs of recovery in recent times, with the Halifax House Price Index beating forecasts in July and August.
As one of the Big Six mortgage lenders in the UK with a 9.5 percent market share puts Barclays (LON: BARC) in prime position to extend growth in that front. On the downside, there’s speculation that plans by UK Premier Keir Starmer to raise taxes in October could affect banks’ windfall earnings. That may not be a problem specific to Barclays, but could eat up a significant portion of its returns.
On the daily chart, the mid-tern pivot will likely be at the GBX 219.85 mark, slightly below the current 20-EMA mark, with initial resistance likely to be at GBX 231.00. However, if the bulls break past that mark, they could head higher to retest the YTD highs of GBX of 241.80.
On the lower side, a move below GBX 219.85 will favour the buyers to take control, with initial support likely to be at GBX .40. However, extended bearishness could breach that mark and send the price to the psychological support at GBX 200.00, marginally above the current 20-EMA.
The Cambridge-based Cybersecurity firm has a mixed bag of fortunes in 2024, ranging from lows of criminal fraud charges against co-founder Mike Lynch and former COO Stephen Chamberlain and their controversial deaths days apart in August, to a high-value takeover by US private equity giant, Thoma Bravo.
Through it all, Darktrace (LON: DARK) has remained resilient and its share price is up by 61.5 percent year-to-date as of this writing. The acquisition valued the company at $5.3 billion, criticised as an overvaluation in some quarters, but seen by some as another strategic takeover by an American giant of a high-potential, but undervalued UK company.
Darktrace just got a new CEO on September 6, with former CEO Poppy Gustafsson stepping down and her position taken over by the immediate former COO, Jill Popelka. The transition will likely destabilise the Darktrace share price in the initial stages given Poppy’s more than 20 years in management at the company, but it does not come as a surprise in view of the new ownership.
Darktrace offers an AI-driven cybersecurity model, which gives it a promising growth outlook as AI adoption grows across the world. In addition, being a Software-as-a-Service (SaaS) company means its cost will likely stay low, and margins stay relatively high, as it does not incur costs associated with large scale manufacturing and/or equipment acquisition costs. Also it is cushioned from supply chain constraints that often limit growth.
On the daily chart below, the mid-term pivot level for the Darktrace share price will likely be at the GBX 570.0 mark. As long as the price stays above that mark, the bulls could attempt moves to the two resistance levels at GBX 601.2 and GBX 625.6. However, a move below GBX 570.0 could build up a bearish momentum that could head to the first support at GBX 549.8 and possibly extend to GBX 520.0.
If you had bought £10,000 worth of Rolls Royce stock a year ago, that stock could have growth to £22,200 as of this writing- an incredible return of 122 percent! For context, the much-hyped Nvidia share price has returned 121 percent over the same period. There are very few mega stocks out there that can compete with Rolls Royce (LON: RR.) over that period.
The British airplane engine manufacturer more than doubled its earnings in 2023, and its earnings in the first half of the year saw it beat analysts expectations. In addition, it announced the first dividends since the 2020 pandemic era, and revised upwards its earnings forecasts for 2024 from £1.7 billion-1.9 billion to £2.1 billion-£2.2 billion.
On the downside, however, Rolls Royce share price could run into headwinds if an investigation by the European Aviation Services Authority (EASA) unearths problems in Airbus A350 engines- fitted with Rolls Royce XWB-97 engines. The regulator ordered an inspection into the engines following a failure in the engine of a Cathay Pacific plane. That said, Rolls Royce has a healthy orderbook, with Cathay Pacific Airways itself having placed an order for the supply of 60 Trent 7000 engines- the largest order by a single airline.
The momentum on Rolls Royce share price show that it has recently broken below the Volume Weighted Moving Average (VWMA), with the Money Flow Index at 24. These signal a weakening buying momentum but the upside could remain in play if the price stays above GBX 460.0.
In addition, a move to 490.7 could strengthen the upside to potentially head to GBX 505, and possibly as high as GBX 520 in extension. However, a move below 460.0 could trigger a deeper decline to potentially test GBX 27.4.
This post was last modified on Sep 08, 2024, 14:00 BST 14:00