With the FTSE 100 having been volatile in recent months, I’m considering the outlooks of BP plc (LON:BP) (BP.L), J Sainsbury plc (LON:SBRY) (SBRY.L), easyJet plc (LON:EZJ) (EZJ.L) and Vodafone Group plc (LON:VOD) (VOD.L). Could they experience challenging futures?
BP’s share price could be impacted by continued falls for the oil price in the near term in my view. It has declined on the back of sanctions waivers being implemented for eight countries which import oil from Iran, with investors seemingly not expecting the move.
In the long term, I believe that BP’s investment in its operations and the recent acquisition of the BHP assets could strengthen its financial prospects. With a near-6% dividend yield, it could offer a margin of safety.
Sainsbury’s could be impacted by continued weak consumer confidence as the Brexit process unfolds. Consumers appear to be becoming increasingly price conscious, with uncertainty seeming to be building ahead of the UK leaving the EU.
However, with the potential for synergies and an improved competitive advantage following the Asda merger, I believe that Sainsbury’s could perform relatively well in the long run. While potentially volatile, I’m optimistic about its strategy and believe it could outperform many of its FTSE 100 retail peers.
easyJet’s financial outlook may improve as a result of there being a lower oil price. However, uncertainty surrounding the wider industry ahead of Brexit may cause its share price to be held back to some degree.
That said, the company trades on a PEG ratio of just 0.8, while it has enjoyed considerable success at gaining new passengers in recent quarters. With a large net cash position and a strong brand, I think easyJet could perform well in the long run.
Vodafone’s share price seems to have been boosted recently by an investor update. The company seems to be relatively optimistic about its future, which is at odds with the consensus among investors during the course of 2018.
Following its share price fall in recent months, Vodafone has a dividend yield of over 7%. In my view, this suggests that it offers a margin of safety. With acquisitions and partnership agreements potentially creating growth catalysts, I feel it could deliver a turnaround in the long run.