As 2024 nears its end, the UK stock market has delivered impressive gains, with the FTSE 100 generating a remarkable 12.7% return for index investors, nearly double the annual average of the past decade. However, for stock pickers, the rewards could have been far more substantial, with the top-performing UK shares achieving gains of over 80% in just six months.
Let’s explore the standout stocks and assess their potential as long-term investments for 2025 and beyond.
Top 10 Best-Performing UK Shares of H2 2024
The FTSE 100’s top performers span a variety of sectors, providing an excellent opportunity for investors to build a diversified portfolio. While these shares have delivered stellar returns, investors must exercise caution, as high valuations can sometimes lead to disappointing outcomes.
To better understand the prospects, let’s take a closer look at International Consolidated Airlines Group (IAG)—one of the standout performers of 2024.
IAG: Riding the Skies to Profitability
British Airways parent company International Consolidated Airlines Group (IAG) has soared to new heights in 2024, outperforming many of its peers in the aviation sector.
Travel Demand Recovery: With travel demand reaching all-time highs, IAG has fully recovered from the pandemic downturn and experienced 5% passenger volume growth and a 7% increase in passenger revenue during Q3 2024.
Profit Margin Expansion: The company’s operating income surged by 29% to £1.4bn in the first nine months, achieving an operating margin of 21.6%, far exceeding rivals like Air France-KLM (13.1%) and Lufthansa (12.5%).
These achievements have propelled IAG’s stock price upward, but challenges loom on the horizon.
Challenges Facing IAG
Despite its impressive performance, IAG faces several hurdles:
Pilot Strikes: Industrial action within its Aer Lingus division has disrupted operations.
Rising Costs: Staff salaries have increased by double digits, affecting profit margins.
Supply Chain Issues: Sector-wide constraints have posed operational challenges.
While IAG has navigated these obstacles admirably, higher costs are not yet fully reflected in its financials, which could slow momentum as 2025 approaches.
What About the Other Top Performers?
The story of navigating growth and challenges applies across the board for the other top-performing UK shares. Investors should carefully analyze each stock to ensure they’re not falling into a growth trap.
Should You Invest in IAG or Other UK Shares Now?
Before making any investment decision, it’s crucial to assess your financial goals and risk tolerance. While the best-performing UK shares of 2024 show promise, thorough research and a focus on fundamentals are essential for long-term success.
Investors looking for opportunities should consider consulting financial experts or resources like Motley Fool Share Advisor, which provides curated stock recommendations for both UK and US markets.
Disclaimer: Investing involves risks. The value of shares can go up or down, and your capital is at risk. Always consider seeking independent financial advice before making investment decisions.