After reaching file highs in Might this yr, development within the UK inventory market has tapered off. The FTSE 100 virtually fell again under 8,000 factors earlier this month (November) after the October Finances and US election shook issues up.

With a number of new insurance policies affecting markets each at residence and overseas, what’s in retailer for buyers subsequent yr?

To reply that query, I sought the knowledge of consultants from the UK and the US.

S&P 500 outlook

Donald Trump’s commerce tariffs are anticipated to ship rates of interest hovering, which might harm US shares. As such, most analysts don’t anticipate sturdy development subsequent yr.

David Kostin, the chief strategist for US equities at Goldman Sachs, thinks the S&P 500 might attain 6,500. That might be roughly a 9% acquire from present ranges — significantly lower than the 26% development achieved to date this yr. Morgan Stanley expects comparable development.

Wells Fargo has raised the higher finish of its goal to six,700 from 6,400. It believes tariffs might be phased in progressively, with most adverse results delayed till 2026. BMO’s chief funding strategist Brian Belski eyes comparable development, with a perception that earnings development is simple.

FTSE 100 outlook

As within the US, UK analysts stay cautious with a touch of optimism. In line with Jefferies, 66% of market respondents anticipate the FTSE 100 to finish 2025 larger. That’s an enchancment from solely 50% final yr.

The Financial Forecast Company predicts the FTSE 100 will attain someplace round 9900 factors in December 2025, up 21% from in the present day. UBS believes the FTSE 250 might take off in 2025, saying it affords “a unique blend of resilience and growth potential.”

A promising FTSE 250 inventory

One inventory I believe has potential is ITV (LSE: ITV). The main British broadcaster and manufacturing firm was within the information this week after it grew to become a takeover goal. The low share price has attracted bid curiosity from personal fairness agency CVC Capital Companions.

The corporate reportedly needs to separate ITV up, taking over the Studios arm for itself and promoting off broadcasting. 

The share price jumped 9% on the information to 71p, recovering losses made earlier in November.

ITV has had a tough few years because it struggles to compete with digital streaming companies like Netflix and Disney+. Whereas its Studios division continues to get pleasure from success with exhibits like Rivals and Love Island, the broadcasting arm is struggling to show a revenue. Declining revenues threaten earnings and put it vulnerable to falling additional into debt. Earnings are forecast to say no subsequent yr earlier than recovering in 2026.

However the falling price additionally equates to an undervaluation. It’s now buying and selling at 72% under honest worth utilizing a reduced money stream mannequin, with a price-to-earnings (P/E) ratio of 5.7. The specter of a buyout could give it the increase it must get well, which may benefit shareholders if it rejects the provide.

The yield of seven.6% stays one of many inventory’s most engaging prospects to me. It’s well-covered by earnings and is forecast to extend by 0.5% per yr going ahead.

I’m unsure what’s going to occur however for now, I’m holding my shares in anticipation.