As a rule, a rising oil price is good for energy stocks. At the start of the crisis, Brent crude traded at just over $60. Today, it’s at $114. If the war drags on, analysts say it could top $120. So how have BP and Shell shares responded?

Since the war began on 28 February, the BP share price is up around 20%. Shell is more sluggish, up a modest 7%. Given that we’re supposedly facing the biggest energy supply shock in history, I expected better. Here’s what I think is going on.

Why aren’t these FTSE 100 stocks doing even better?

First, the higher oil price hasn’t shown up in profits yet. BP reported yesterday, but its Q1 results ran to 31 March, so they only caught the early stage of the spike. Second, investors have broadly accepted Donald Trump’s assurances that the war is under control. Nobody wants to go big on BP and Shell, only for the Strait of Hormuz to reopen next day. Their shares will plunge as a result.

There’s a longer-term worry. The oil shock might ultimately rebound on Big Oil. It could trigger more windfall taxes, and persuade import-dependent countries to accelerate their switch to renewables. Nobody is taking anything for granted. Yet one thing is clear. BP and Shell have been terrific investments lately.

Over the last 12 months, their shares are up 60% and 34%, respectively. If an investor had split a £20,000 Stocks and Shares ISA equally between them one year ago, their BP stake would be worth £16,000 and Shell £13,400. But that’s not all they’d have.

BP has a trailing yield of 4.25%, with Shell’s at 3.25%. That lifts their total returns to roughly £16,425 and £13,725, respectively. In total, the two energy giants have turned a £20,000 ISA investment into £30,150, in just one year. That shows the supreme wealth-building power of shares. But can it continue?

They’re risky, but are they rewarding?

Given today’s high oil price, there’s a good chance of more rewards. Yesterday (28 April), BP said underlying replacement cost profit more than doubled from $1.5bn to $3.2bn in Q1, boosted by its busy trading division. Yet there are still challenges. Net debt rose by $3.1bn to $25.3bn, the board said, “primarily driven by lower operating cash flow”. Shell’s debt is higher still, climbing $6.9bn in 2025 to $45.7bn. However, it’s the bigger company, with a market cap of £184bn versus £83bn.

BP has been the messier story, lurching into renewables then back out again, with boardroom issues along the way. Its shares trailed Shell for years but are now playing catch-up, which helps explain recent superior gains.

As ever, there are risks. The Iran conflict is unguessable. A global recession could hit oil demand. The UAE is pulling out of OPEC, which could boost supply and squeeze prices in the longer term. And there’s climate change. BP and Shell remain high-risk, high-reward stock opportunities. I think both are well worth a closer look, for investors who have a taste for excitement – and dividend income.

The post A £20,000 ISA invested in red-hot BP and Shell shares 1 year ago is now worth… appeared first on The Motley Fool UK.

Harvey Jones has positions in Bp P.l.c. The Motley Fool UK has no position in any of the shares mentioned. 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.

Motley Fool UK 2026

Despite the index’s strong performance, though, not all of its 100 constituent members are doing so well.

Here are three blue-chip UK shares I think potentially look cheap from a long-term perspective — and worth considering.

Associated British Foods

For years, Associated British Foods (LSE: ABF) has faced a couple of ongoing challenges.

One is how to convince customers that foodstuffs and ingredients deserve a price premium. Using brands like Twinings can help, but ABF’s portfolio contains unbranded as well as branded products.

A second challenge has been getting investors to value the Primark discount clothing chain attractively. Its loyal customer base and strong brand can sometimes feel overlooked by investors.

Those challenges persist as April ends.

Inflation driven by the Middle Eastern war threaten the food business’s profit margins, though for now the company has said the cost consequences for this year ought to be “manageable“.

This month also saw plans to demerge Primark as a standalone listed company. Over time, that could help unlock value if investors perceive it differently out of the ABF structure. Meanwhile, ABF’s foods business is unexciting but well-run and profitable.

Taken together, the company’s price-to-earnings (P/E) ratio of 14 and 3.6% yield look attractive to me following a 14% share price fall so far this year.

Reckitt Benckiser

A FTSE 100 company that has had an even worse start to 2026 is Vanish-owner Reckitt Benckiser (LSE: RKT).

Its share price has plummeted by a quarter so far this year. The P/E ratio of 10 is even cheaper than ABF. Reckitt’s 4.6% yield is well above the 3.0% average of the FTSE 100 overall.

Reckitt clearly has challenges that have hurt its share price. Take your pick: ongoing legal risks in its infant formula business, ingredient cost inflation, weakening consumer sentiment in key markets, like-for-like sales declines in both North America and Europe in the first quarter – and more.

But I think Reckitt also has the tools to deal with such challenges over time. Its premium brands give it pricing power and it operates in product categories that will endure, like detergents and cleaning agents.

It may take years, but I expect Reckitt will ultimately be worth considerably more than today.

WPP

Still, I could have the balance of risks and potential rewards wrong with Reckitt. Nobody knows the future. An even trickier share in that respect is ad group WPP (LSE: WPP).

The WPP share price has crashed by 21% so far this year. That is on top of a dreadful performance last year, meaning it has more than halved in 12 months.

The clear culprit? AI.

Investors are fretting that AI could eat ad firms’ business.

So far, WPP has not convincingly reassured them. Like-for-like revenue fell 4% year on year in the first quarter.

Still, with its 5.6% dividend yield, deep expertise, superb client roster, and its own plans to use AI to help the business, WPP looks potentially cheap to me, although risky.

I plan to hang onto my shares.

The post 3 FTSE 100 shares I think look undervalued heading into May appeared first on The Motley Fool UK.

C Ruane has positions in WPP. The Motley Fool UK has recommended Associated British Foods Plc and Reckitt Benckiser 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.

Motley Fool UK 2026

The actual results show a solid performance to start the 2026 year. But one broker, at least, isn’t impressed. Shore Capital has Lloyds as a Sell, on the basis that the latest results were already baked into the share price — implying there’s little room for safety.

So what did the quarter actually look like? Highlights include…

• Statutory profit before tax up 33% year on year
• Underlying net interest income up 8%
• Operating costs reduced by 3%

But one thing Shore points out is that the Lloyds share price is around 1.7 times tangible net asset value, which it sees as too high. So should I dump my Lloyds shares? I don’t feel any urgent need to hit the Sell button, but we do need to dig a bit deeper.

Short-term targets

I’m sympathetic to a potential asset-related overvaluation. And with Lloyds so heavily into the UK’s mortgage market, I think that might weigh on sentiment. Especially as the latest expected round of inflation and economic squeeze could put more pressure on asset values.

But even Shore’s bearish Lloyds share price target helps to reassure me a little. It’s at 91p, and only 6% below the price at the time of writing. If I sold shares every time I thought they might be 6% overvalued, and bought when they looked 6% undervalued… I’d quickly spend all my money on trading fees.

I want to think beyond the latest numbers themselves — which are just a short-term snapshot, at a confusing time for economic and company outlooks. And I’m struck by something CEO Charlie Nunn said…

Our differentiated business model remains resilient in the context of the current economic uncertainties. We remain focused on supporting UK households and businesses as they look to strengthen their financial positions and achieve their goals.

Trust in the UK?

Buying Lloyds shares is very much an investment in the UK itself. And it does come without the direct global worries that afflict other banks — though in addition to not enjoying their international opportunities. So an obvious question for potential investors arises in my mind: do you have confidence in the long-term future of British businesses?

My personal answer is yes. Otherwise, how could the UK stock market have so soundly beaten other forms of investment for well over a century?

Inflation and interest rates are indeed threats for Lloyds. And valuation concerns in the light of current uncertainties are real ones. Valuation fears — after a 113% rise over five years — could alone mean a further weak spell for the Lloyds share price.

But I’m holding. And I don’t think investors should write off considering Lloyds shares — though waiting another few months for more clarity might help.

The post As the Lloyds share price falls while profits rise, is it time to dump? appeared first on The Motley Fool UK.

Alan Oscroft has positions in Lloyds Banking Group Plc. The Motley Fool UK has recommended Lloyds Banking 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.

Motley Fool UK 2026

However, the FTSE 100 stock has come off the boil recently, falling 18% since early March. This is due to a combination of factors, including rising jet fuel costs, cancelled flight routes, and cautious forward guidance from rival widebody engine maker GE Aerospace.

AGM incoming

Arguably then, what the stock needs is a positive catalyst. Rolls’ annual general meeting (AGM) will be held tomorrow (30 April), so we might get a trading update confirming that full-year guidance is still on track (or not).

After that, the next major catalyst will probably be the firm’s half-year report, which is due late July. The stock tends to see a lot of action one way or the other after the interim results (usually up in recent years).

As a reminder, Rolls has guided for full-year underlying operating profit of £4bn–£4.2bn, and free cash flow of £3.6bn–£3.8bn.

The company has been masterful at setting ambitious targets then demolishing them. But that might be getting harder due to the difficult backdrop of restricted airspace and cancelled flights.

SMRs are huge business

Clearly, the near term is looking tricky and this adds risk. However, as a shareholder who’s more interested in the next decade, I remain very bullish, especially on small modular reactors (SMRs). Or mini nuclear reactors.

If Rolls manages to become a global leader in this space, as it expects to, the opportunity could be enormous. How big? Well, the International Energy Agency (IEA) sees SMR total capacity potentially reaching 120 GW in 2050, with more than 1,000 SMRs deployed.

Cumulative investment could top $670bn by 2050!

Now, this is the IEA’s bullish scenario, but the base case is SMR capacity reaching 40 GW. CEO Tufan Erginbilgic estimates as many as 400 SMRs by 2050.

Whichever way you cut it, this is a high-growth market. Each unit will reportedly cost approximately £2bn–£3bn, assuming the technology is capable of operating at scale (this isn’t proven yet).

Beating the drum

Therefore, it was encouraging to read last week that UK government figures have been in Europe trying to drum up business for Rolls-made SMRs. According to The Telegraph, Business Secretary Peter Kyle has been talking to Sweden and other European allies.

Rolls-Royce SMR has already signed contracts with the UK and Czech Republic to build mini nukes. In doing so, it’s the only company with multiple contractual commitments to deliver SMR units in Europe.

“I’m in advanced talks with Sweden. I’m also beating the drum with other European countries and further afield,” Kyle told The Telegraph.

To be fair, Rolls is already in the final in Sweden along with GE Vernova to supply its SMR tech to state energy giant Vattenfall. But there’s now talk that Germany is considering SMRs to increase its energy independence due to the 2026 disruptions.

If Rolls-Royce SMR can attract orders from other major European countries, especially Germany, the stock should get a decent boost.

Dip-buying opportunity?

Even after falling 18%, the stock isn’t cheap. We’re looking at a forward earnings multiple of 29.

But for investors willing to look beyond the near-term uncertainty, I reckon Rolls is worth a closer look.

The post Up 1,000% in 5 years, but the UK government could send Rolls-Royce shares even higher appeared first on The Motley Fool UK.

Ben McPoland has positions in Rolls-Royce Plc. The Motley Fool UK has recommended GE Vernova and Rolls-Royce 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.

Motley Fool UK 2026

• Oncology sales up 28%, Shingrix vaccine sales up 20%.
• Full-year guidance reaffirmed.
• Over £40bn sales targeted by 2031.

Some of the figures were a bit mixed, but I can’t help thinking investors might have missed the big picture. Let’s take a closer look.

Sales up, but…

Total sales in the quarter reached £7.6bn. But that did mean only a modest 2% rise — or 5% at constant exchange rates (CER). And though Shingrix led GSK’s vaccine sales, Arexvy vaccine sales fell 18%. And General Medicines dipped 6% at CER.

I don’t, however, really think that takes much of the edge off what looks like an impressive quarter. And I’m buoyed by what CEO Luke Miels had to say about upcoming prospects.

Alongside operational delivery, we are focused on execution and accelerating R&D. This is visible in filings we have achieved for bepirovirsen, our potential functional cure for hepatitis B; updated phase III plans for our oncology ADCs; and completed acquisitions for new pipeline assets: ozureprubart for food allergies, and HS235 for pulmonary hypertension.

These mostly target ailments on the rise in wealthy, developed, nations. Addressing those has to be a good thing, for so many reasons.

What should we expect?

A plan to exceed £40bn in sales by 2031 could make GSK shares a very nice long-term investment. And it could happily fuel a progressive dividend prospect. The company has 70p per share pencilled in for the full year, which would mean a 3.6% dividend yield on the price at the time of writing.

But what does management see happening in 2026? Full-year guidance (at CER) hinges on three key expectations:

• Turnover to increase between 3% and 5%.
• Core operating profit to increase between 7% and 9%.
• Core earnings per share to increase between 7% and 9%.

The shares look cheap

Investors had been piling into the stock after February’s FY25 results. I don’t see anything so far to take the shine off what was an impressive year, and GSK shares are still up 7% year to date. But enthusiasm appears to have cooled, with the price falling back.

Whatever’s turned investors off the stock, even if only briefly, I can’t really see it being valuation. Forecasts put the forward price-to-earnings (P/E) ratio at under 13. And that’s even with analysts predicting a 28% rise in earnings between 2025 and 2028.

There’s one major hurdle in the road ahead, though. GSK faces the expiry of a handful of blockbuster drug patents before the end of the decade.

Don’t panic!

Against that, it has a good number of very promising drugs reaching late trial stages. There’s nothing guaranteed, of course. And it’s good to be aware of the cost and risk of failure of any prospect.

But right now, I see this as a good time for long-term investors to consider GSK shares while the valuation looks a bit weak.

The post As GSK shares fall 5% on Q1 news, is this a buying opportunity? appeared first on The Motley Fool UK.

Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has recommended GSK. 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.

Motley Fool UK 2026

That’s not too shabby considering we’re just four months into the year. And it easily beats the performance of some of the most popular stocks of the last year among UK investors, including Rolls-Royce (-5.2%), Nvidia (+13.3%), and BP (+32.3%).

Even more astonishing, however, is Ceres Power’s one-year performance, which now stands at 933% after the stock jumped 19% today (29 April).

What on earth has sent it stratospheric? And given that it’s still down 55% over a five-year period, might it be worth considering buying now? Let’s take a closer look.

What does it do?

Ceres is a clean energy technology developer at the forefront of solid oxide fuel cell and hydrogen technologies. However, rather than building products, the company licences its IP to big industrial partners, including Doosan (South Korea), Weichai Power (China), and Delta Electronics (Taiwan).

In this sense then, Ceres is a bit like the Arm Holdings of the energy world. When successful, such asset-light licensing models can be wildly profitable and therefore very valuable. The company earned its first royalties last year.

When companies license our technology, they’re effectively bringing Ceres on board as their in-house R&D team. What they’re truly investing in is the ability to stay at the forefront of innovation, which is why we continuously invest in developing and safeguarding our intellectual property through innovation, backed by…the expertise of the world’s largest solid oxide team.
Ceres Power.

AI energy boom

As promising as this sounds, the stock’s almighty rise doesn’t appear to have anything to do with the company’s financials.

Last year, revenue was £32.6m, down from £51.9m the year before. Actual profits aren’t expected by City analysts in either 2026 or 2027.

No, the reason the stock is on fire is due to investor excitement around the data centre buildout to support artificial intelligence (AI).

The Philadelphia Semiconductor index, which is made up of the 30 largest US chip stocks, has rocketed 38% so far this month. It’s on course for its best month in 26 years, since just before the dotcom bubble burst.

Last month, Ceres announced a collaboration with Centrica to accelerate the deployment of solid oxide on‑site power solutions. It said this will enable “fast, scalable deployment of high‑efficiency, fuel‑flexible on‑site generation for data centres, AI compute hubs, advanced manufacturing, logistics and distribution centres“.

Fuel cells can be deployed much faster than traditional options, positioning Ceres as an emerging ‘picks and shovels’ player in the AI energy boom. And momentum-chasing investors continue to lap up these types of stocks.  

Is Ceres still worth checking out?

In July, when the stock was trading at 143p, I said Ceres was worth considering for adventurous investors. I wrote that “the value of its IP may be very underappreciated right now“.

However, with the stock now near 600p, the valuation is a concern. We’re looking at a frothy price-to-sales ratio of 35.

Granted, on a forward-looking basis, this comes down to 19 because Ceres’ revenue is expected to almost double to £60m this year. But that’s still high for a loss-making firm.

Therefore, I think investors interested in the stock should tread carefully.

The post Meet the FTSE 250 stock that has left Rolls-Royce, Nvidia and BP in the dust appeared first on The Motley Fool UK.

Ben McPoland has positions in Nvidia and Rolls-Royce Plc. The Motley Fool UK has recommended Nvidia and Rolls-Royce 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.

Motley Fool UK 2026

The full new State Pension is now worth £12,547.60. That’s a whisker below the personal tax allowance today. Next year it will definitely exceed it. That means every penny of income from other sources will be taxable. But income from an ISA will remain tax-free, whether that’s savings interest from a Cash ISA or dividends from a Stocks and Shares ISA. You don’t even have to mention ISA holdings on your tax return, which saves a lot of time and trouble.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Let’s say somebody fancies effectively doubling their State Pension income, by using their ISA to generate a regular passive income in retirement.

Get HMRC off your back

How much investors need to generate that £12k+ a year depends on the underlying yield on their ISA. Today, the average easy-access Cash ISA pays 2.73%, according to Moneyfacts. With that, they’d need a savings pot of £459,619.

However, if they built a balanced portfolio of dividend-paying FTSE 100 shares with an average 4% yield, they could target the same income with a £313,690 pot. And if they targeted shares yielding 5% on average, they could potentially do it with just £250,952.

Over the last 10 years, the average Stocks and Shares ISA has grown at 9.5% a year, against 4% for Cash ISAs. So investors could have a much bigger pot in retirement, and potentially be able to generate more income from it too.

Lloyds shares offer income and growth

One stock I really like today is Lloyds Banking Group (LSE: LLOY). Its shares are up 35% in the last year, and 115% over five. That’s a brilliant performance, and it’s not even the main attraction for me. Lloyds is also a brilliant dividend stock. With dividends reinvested, the total five-year return nears 140%. That would have turned £10,000 into roughly £24,000.

Lloyds published first-quarter results today. So were they good? They certainly were. Underlying profit rose a bumper 31% to £2bn compared to last year. That was even better than markets had expected. Earnings have been boosted by higher interest rates, which allow banks to widen the margin between what they pay savers and charge borrowers. With interest rates likely to rise as inflation picks up, margins could climb still higher.

Lloyds could take a hit from the slowing UK economy, which could hurt mortgage lending. Also, its shares are more expensive than they were. The forward price-to-book ratio is 1.3, notably above its 10-year average of 0.85.

But with the shares forecast to yield 5.1% next year, I think this remains a compelling dividend income opportunity. Over time, I expect a fair bit of share price growth too. I think it’s well worth considering for investors seeking passive income on top of their State Pension and growth potential too.

The post How much is needed in an ISA for an annual income equal to this year’s £12,547 State Pension? appeared first on The Motley Fool UK.

Harvey Jones has positions in Lloyds Banking Group Plc. The Motley Fool UK has recommended Lloyds Banking 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.

Motley Fool UK 2026

CEO Pascal Soriot told us the company is “on track to achieve our ambition for 2030 and beyond.”

The share price dipped a couple of percent, edging into negative territory year to date. But AstraZeneca is still up 19% over 12 months — and has soared 85% in the past five years. Let’s dig in and see what’s happening…

Double-digit growth

The company reported a 5% rise in core earnings per share. And the board says it expects mid-to-high single-digit revenue growth and low double-digit core EPS growth for the full year.

It’s hard to think of a better example of how a long-term plan can outstrip short-term earnings targets than AstraZeneca. And it’s all thanks to the stunning turnaround Pascal Soriot kicked off when he took on the challenge in 2012. AstraZeneca needed to focus on getting its research pipeline up to strength. And the new boss made it clear it would need time and patience.

As an aside, an investor who put £5,000 into AstraZeneca on the day Soriot became boss would today be sitting on shares worth £23,550, by my calculation.

What’s next?

Looking at these results, I’m struck by one part of what the CEO said.

We are advancing through our catalyst‑rich period, with positive readouts for four high-value Phase III programmes since our last quarterly results, including first pivotal data for two key NMEs – tozorakimab in COPD and efzimfotase alfa in hypophosphatasia.

Expertise in oncology and rare diseases lies behind AstraZeneca’s success. And these new developments, with the boss talking about multiple launches in preparation, convince me the company still has its eye on the ball — and its sights set on long-term growth.

There’s a strategic collaboration with CSPC Pharmaceuticals too, “to advance the development of multiple next-generation therapies for obesity and type 2 diabetes.” AstraZeneca will invest $1.2bn upfront.

Potential pitfalls

An aggressive drug research pipeline is, however, in part a case of running to stand still. We’ll see the expiry of some profitable patents in the coming years, including a handful of blockbusters.

And even an impressive pipeline like AstraZeneca’s is no guarantee that lost blockbuster profits will be replaced. It’s a problem that faces all pharmaceutical companies.

Whether the stock’s high valuation is fair is a tricky question. We’re looking at a forward price-to-earnings (P/E) ratio of close to 24 for the current year. And this is a company with only modest dividend yields — there’s 1.7% forecast for this year.

So what’s the verdict?

The weak reaction to this latest quarter doesn’t surprise me that much, as a company can need to smash expectations to impress growth investors at these levels. And this was largely as expected.

But I think AstraZeneca deserves its premium rating, and I reckon long-term ISA investors should consider it.

The post What next for AstraZeneca shares, after another cracking quarter? appeared first on The Motley Fool UK.

Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has recommended AstraZeneca 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.

Motley Fool UK 2026

Could this potentially mark the start of a turnaround in the beleaguered company’s fortunes?

Some signs of progress

Let’s start with the positives in the latest quarterly statement.

Aston Martin maintained its full-year outlook “whilst remaining mindful of the broader macroeconomic and geopolitical backdrop”.

That might not sound very positive, but given the company’s history of disappointing shareholders and the current global economic uncertainty, I do see it as positive. That said, the caveat gives the company wiggle room should business go downhill later in the year.

Another piece of good news was that what the company calls its core retail volumes in the quarter were significantly ahead of wholesale volumes.

Reducing the amount of capital tied up in cars sitting in dealerships can help the company’s financial breathing space, which is especially welcome given its £1.5bn net debt.

Gross profit margins were also well ahead of the same quarter last year, at 34.7% this time round, compared to 27.9% back then.

This was partly due to ramping up deliveries of the Valhalla supercar. With more Valhalla sales anticipated, the mix of products sold could bode well for the company’s profitability.

A long road ahead

Still, profit remains elusive. The operating loss was reduced considerably, but still registered as a loss not a profit.

I see making money at the operating level as a crucial first step to fixing Aston Martin’s financial health, as the company has a lot of non-operating costs on top of that. The latest quarter demonstrates that. The operating loss was £8.9m, but the company’s loss before tax was far greater, at £65.5m.

But again, that is better than the same number in the prior year’s quarter, it is still substantial.

Servicing the company’s debt – much of it at high interest rates – is expensive. It net interest costs of £150m this year.

Meanwhile, that macroeconomic and geopolitical backdrop is a significant ongoing risk for the firm. It could hurt demand, add costs such as tariffs or lead to delays in the company’s supply chain. None of those would be good for profits.

I have no desire to invest right now

With its strong brand, well-heeled customer base and proven technical prowess, the business has a lot of strengths as a business.

But it has been consistently unable to turn them into profits at the operating level. Even if it can do that at some point, managing its non-operating costs remains a substantial challenge.

The company has repeatedly tried to improve its balance sheet by issuing new shares, diluting existing shareholders. That remains a risk.

The risks overall are far too great for me. If Aston Martin can keep improving its financial performance and not disappoint the City yet again, its share price could potentially move up strongly from here.

For now, though, with it still not having proved it can be consistently profitable, I have no plans to invest.

The post Could there be light at the end of the tunnel for the Aston Martin share price? appeared first on The Motley Fool UK.

C Ruane has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

Motley Fool UK 2026

Let’s dig a little deeper and see what’s going on.

Beating expectations

The headline numbers were as follows:

• Net interest income: £3.57bn compared to the consensus estimate of analysts of £3.55bn.
• Net interest margin: 3.17% versus a forecast of 3.15%.
• Earnings per share (EPS): 0.3p better than predicted at 2.4p.

Overall, the bank’s post-tax profit was £215m better than analysts had expected. Importantly, its impairment charge came in £95m lower.

Those looking for evidence of how much progress the bank has made over the past year, should consider its EPS. This quarter, it was 0.7p better than a year ago. As well as higher income and lower costs — its cost-to-income ratio has improved by a massive 6.2 percentage points over the past 12 months — a significant share buyback programme has helped contribute to this impressive performance.

Given that all of the bank’s key performance measures are going in the right direction, I find the lack of enthusiasm among investors a little surprising.

Of course, in some respects, Lloyds is a victim of its own success. Its recent share price rally suggests that the City has already priced in some of this improvement. But the bank’s share price remains around 14% below its 52-week high. Judging by today’s reaction, it’s going to need something special to get it back to the level it enjoyed at the start of February.

We are confident in our delivery for the year ahead and reiterate our guidance for 2026

Charlie Nunn, Chief Executive, Lloyds Banking Group

However, in my opinion, there’s not much to dislike about the results.

So, is it worth me considering taking a stake in the UK’s second-largest bank?

My view

I don’t think so.

For a long time now, I’ve thought that analysts are being overly optimistic when it comes to the group’s future prospects.

Admittedly, today’s results are another reminder that I could be wrong. However, it’s too early to tell for sure. Even so, I’m not tempted to invest. Although interest rates look likely to remain higher for longer than previously expected, which should help the margin, it could tip some already struggling borrowers over the edge.

And its dependence on a fragile domestic economy remains a concern. Among G7 countries, the OECD says the UK will be the worst affected by events in the Middle East. Due to high government debt and a reliance on energy imports, higher oil and gas prices are expected to lead to rising inflation and damage economic growth.

Of further concern, a recent survey found that business confidence is at its lowest level since the pandemic.

Against this backdrop, I find it hard to see how Lloyds can continue to meet (or exceed) analysts’ forecasts. But I’ll admit I’ve been proved wrong before. The share price defied my expectations throughout most of 2025, soaring by an incredible 79%.

However, given the uncertainty at the moment, I’m going to wait another three months and look again next quarter. In the meantime, I’ll continue to explore other exciting opportunities.

The post What next for Lloyds shares after better-than-expected Q1 results? appeared first on The Motley Fool UK.

James Beard has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking 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.

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