Is the stock market on track to surge by 32% in 2025?

Analyst stock market forecasts for 2025 are becoming increasingly bullish, and I think this FTSE 100 stock looks primed to surge.

| 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.

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.

2024 has been a terrific year for the stock market so far. Here in the UK, the FTSE 100 has delivered a 10.3% total return over the last nine months, and across the pond, the S&P 500 is up 22.2%! Both indexes have reached new all-time highs this year. But could this be just the tip of the iceberg?

Both the Bank of England and US Federal Reserve central banks have now begun their interest rate-cutting programmes. Inflation has largely cooled off, and so now it’s time to spark growth in these leading economies.

Rising optimism

The change in monetary policy is fantastic news for businesses. Regardless of whether customers are consumers or companies, a lot of spending has been cut until a more favourable economic environment emerges.

Should you invest £1,000 in BHP 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 BHP made the list?

See the 6 stocks

Assuming the current trends continue, that could mean a significant boost in spending could be right around the corner in 2025 as budgets are reset to capitalise on lower interest rates. And with that likely comes higher stock prices as more businesses start to announce the return of earnings growth.

Looking specifically at the UK, the Economy Forecast Agency (EFA) currently has predicted the FTSE 100 to potentially reach as high as 10,920 points by the end of 2025. Compared to current levels, that’s an estimated surge of 32% within the next 15 months. And that’s before even taking dividends into account.

Needless to say, that’s quite an exciting prospect, and it’s three times the size of the stock market rally we’ve enjoyed so far!

Capitalising on momentum

Forecasts always need to be taken with a pinch of salt though. After all, they’re dependent on a lot of assumptions that seldom come true. And even the EFA has admitted its projections could be off with its more pessimistic outlook projecting the FTSE 100 to ‘only’ reach 9,492 points.

That’s still a 12% potential rise versus today, but it highlights the wide range of expected outcomes. Nevertheless, analyst projections are becoming increasingly positive for 2025. So, what are the best stocks to buy now to capitalise on this looming momentum?

Looking at my own portfolio, Howden Joinery (LSE:HWDN) is looking increasingly promising. Known primarily as a fitted kitchen designer and supplier, Howden has been busy expanding its business over the last year. The group has improved customisation options and even begun venturing into the realm of fitted bedrooms. However, none of these developments seems to have been reflected in its financials yet.

Created with Highcharts 11.4.3Howden Joinery Group Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

Looking at its latest interim results, growth across the UK and abroad has slowed to a crawl. Given the high cost of home renovation, it seems that many customers are simply waiting for lower interest rates before committing to their projects.

Now that interest rate cuts have started, Howden’s return to double-digit growth could be right around the corner. Of course, it’s not the only firm in this sector seeking to capitalise on this upcoming tailwind. Competition from other kitchen suppliers could impede its 2025 performance, especially if they’re able to offer more competitive prices.

Nevertheless, Howden’s long track record, paired with the market opportunity in 2025, gives me sufficient confidence to invest despite the risks.

But this isn’t the only opportunity that’s caught my attention this week. Here are:

5 Shares for the Future of Energy

Investors who don’t own energy shares need to see this now.

Because Mark Rogers — The Motley Fool UK’s Director of Investing — sees 2 key reasons why energy is set to soar.

While sanctions slam Russian supplies, nations are also racing to achieve net zero emissions, he says. Mark believes 5 companies in particular are poised for spectacular profits.

Open this new report5 Shares for the Future of Energy — and discover:

  • Britain’s Energy Fort Knox, now controlling 30% of UK energy storage
  • How to potentially get paid by the weather
  • Electric Vehicles’ secret backdoor opportunity
  • One dead simple stock for the new nuclear boom

Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!

Grab your FREE Energy recommendation 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.

Zaven Boyrazian has positions in Howden Joinery Group Plc. The Motley Fool UK has recommended Howden Joinery Group Plc. 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

Hand of person putting wood cube block with word VALUE on wooden table
Investing Articles

Around a 1-year high, is there enough value left in Next’s share price to make it worth me buying?

Next’s share price has risen a lot in eight months, but there could still be a lot of value left…

Read more »

Group of young friends toasting each other with beers in a pub
Investing Articles

OMG DYOR but IMO this ‘cool’ FTSE 100 stock offers bangin’ VFM!

Despite being one of the least trendy 50-somethings around, our writer considers how Gen Z could help push this FTSE…

Read more »

Investing Articles

2 cheap FTSE 100 and FTSE 250 growth stocks to consider as stock markets sink

I think these Footsie and FTSE 250 growth shares could be very shrewd buys to consider in the current climate.…

Read more »

Investing Articles

3 shares I’ve bought in the 2025 stock market sell-off

The stock market has experienced a lot of turbulence in recent weeks. Edward Sheldon has been taking advantage and buying…

Read more »

Investing Articles

Investors considering HSBC shares could aim for £8,453 a year in passive income from just £5 a day!

A relatively small daily investment in HSBC shares over several years can produce an extraordinary level of annual passive income…

Read more »

Investing Articles

The Rolls-Royce share price has fallen! Is this the moment investors have been waiting for?

Even the Rolls-Royce share price can't escape current stock market volatility, falling slightly over the last week. Should investors consider…

Read more »

Modern suburban family houses with car on driveway
Investing Articles

Down 59% from its 12-month highs, is this FTSE 250 stock too cheap to ignore?

Shares in FTSE 250 housebuilder Vistry are almost certainly too cheap to ignore. But are they discounted enough to offset…

Read more »

Young Asian woman with head in hands at her desk
Investing Articles

As the S&P 500 struggles to recover, here’s what Warren Buffett’s doing

The S&P 500 is fighting to regain its February highs amid ongoing trade tariff uncertainty. Our writer looks to the…

Read more »