Financial giant Lloyds Banking Group (LSE: LLOY) undoubtedly has a lot of work in front of it to hurdle expectations of meaty losses in 2017 and beyond.
Tough economic conditions look likely to dent consumer spending and business activity in the coming months, as well as raising the possibility of an increase in bad loans. The Bank of England seems likely to keep interest rates locked around record lows to limit the impact of Brexit-related readjustment. And, on top of this, a steady pick-up in PPI claims in recent months suggests that Lloyds may also see financial penalties increase yet again.
Clearly there is a lot of turbulence that could see Lloyds’ share price fall for a fourth consecutive year. So here I am looking at three FTSE 100 (INDEXFTSE: UKX) companies I expect to put in a sunnier performance this year.
Unlike Lloyds, advertising giant WPP’s (LSE: WPP) broad geographic focus puts it on a safer footing than the Black Horse bank, in my opinion.
The company saw revenues soar by almost a quarter during July-September, to £3.61bn, and noted particular strength “in Western Continental Europe and Asia Pacific, Latin America, Africa & the Middle East and Central & Eastern Europe.”
And WPP has continued splashing the cash abroad in recent weeks — more specifically, in emerging markets — to bolster its international revenues outlook still further.
Just today, the business announced it had bulked up its holdings in MediaCom India, in a move that gives the company a majority stake. This follows news it was taking full ownership of two Chinese communications and advertising joint ventures last week, and the acquisition of Brazilian digital marketing specialist Pmweb at the turn of the year.
The City expects these measures to blast earnings 14% higher in 2017 alone, resulting in an attractive P/E ratio of 14.5 times.
Insurance star RSA Insurance (LSE: RSA) is also enjoying surging demand for its services in foreign climes, a factor that drove net written premiums across the core businesses 6% higher between January and September, to £4.82bn.
While RSA may currently be experiencing pressures in some of its markets, the result of massive restructuring to concentrate on key markets like Scandinavia, Canada and the UK & Ireland should keep earnings chugging higher in the near-term and beyond.
With RSA also benefitting from positive currency movements, earnings growth of 49% is chalked in for this year, producing a very decent P/E ratio of 13.5 times.
A recovering luxury market also promises to drive earnings higher at Burberry Group (LSE: BRBY) in 2017 and beyond.
The bag maker saw underlying sales shoot 4% higher between October and December, while — helped by currency tailwinds — reported revenues galloped 22% higher.
Improving conditions in Hong Kong and accelerating demand in mainland China helping sales in the critical Asia Pacific region higher again. And the good news did not stop here, with Burberry also reporting double-digit improvements in the Europe, Middle East, India & Africa (or EMEIA) region, powered by a 40% surge in the UK.
The City expects Burberry to punch earnings rises of 8% and 9% in the years to March 2017 and March 2018, respectively. While subsequent P/E ratings of 21.8 times and 20 times may look a tad heady on paper, I reckon the evergreen popularity of Burberry’s high-end products merits such a premium.
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Royston Wild has no position in any shares mentioned. The Motley Fool UK has recommended Burberry. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.