3 Recovery Candidates For 2015: Tesco PLC, BG Group plc And GlaxoSmithKline plc

Some of our top FTSE 100 companies have had a tough year in 2014, but that’s left us with some tempting recovery candidates for 2015. Here are three you might care to ponder while recovering from your own festive activities:


I’ve lost count of the number of times I’ve heard (or even said myself) that Tesco (LSE: TSCO) surely can’t fall any further — and then it does!

The latest bad news was a surprise profit warning on 9 December, which slashed expected full-year trading profit to £1.4bn — less than half of 2013’s figure! Some are even expecting the already-pared dividend to be cut further, but I’d be surprised if that happens.

When we get Tesco’s Christmas trading update due in early January I wouldn’t be too shocked to hear further bad news, and that could knock the share price further. But even with reduced forecasts, 2015 could well prove to be the bottom in terms of both profitability and share price.


The big problem for BG Group (LSE: BG) is the plummeting price of oil — although Brent Crude has ticked up since dipping below $60, and the BG share price has come back a little in response.

Oil prices this low are not sustainable over the long term, as the cost of production for many companies (and entire countries, in fact) is just too high to keep volumes up. So we’ll surely see a recovery in oil prices in 2015 and BG, with its 570,000 barrels per day plus its status as the largest supplier of liquified natural gas to the United States, should benefit.

Forecast dividend yields are modest, but they should be around thrice covered.


GlaxoSmithKline (LSE: GSK) used to be though of as the UK’s number one in the pharmaceuticals business with AstraZeneca placed second — but what a difference a few years plus Pascal Soriot can make! Astra has leapfrogged Glaxo in the race to rebuild development pipelines after the loss of patent protection on a number of key drugs.

But with Glaxo’s share price down around 15% in the past 12 months and 2015 expected to be the year its fall in earnings per share is arrested, we could be looking at turnaround time for the shares too.

Dividends are expected to be maintained and would yield 5.9% this year and next if forecasts come good — they wouldn’t quite be covered by earnings, but Glaxo has the cash to make those payments in the short term.

Looking for recovering blue-chip stocks like these three could give your millionaire aspirations a boost in 2015.

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Alan Oscroft has no position in any shares mentioned. The Motley Fool UK has recommended GlaxoSmithKline. The Motley Fool UK owns shares of Tesco. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.