- 63% of all analysts’ recommendations on FTSE 350 stocks are ‘buys’ entering 2026 and just 7% are ‘sells’
- This makes sense as mood tends to follow price
- Analysts had a good year in 2025: their top picks beat the market (for the third year in a row) and the least popular stocks underperformed for good measure (for the second straight time)
- Perhaps a global move to diversify away from previously dominant US and technology assets, and an increased focus on ‘value,’ is giving active stock pickers a chance to shine
“As we enter 2026, 61% of all analysts’ recommendations are buys and just 8% are sells for constituents of the FTSE 100, the highest and joint-second-lowest scores over the past 12 years, respectively. For the FTSE 350 index 63% of all recommendations are positive ratings and just 7% negative ones,” says AJ Bell investment director Russ Mould.
“Better still, analysts covered themselves in glory in 2025, as their top picks outperformed and their least preferred names did less well than the FTSE 100. Perhaps momentum, US equities and tech are no longer the only game in town, as investors seek to at least calibrate their exposure to richly valued, dollar-denominated assets and hunt out alternatives. This in turn may be giving active stock pickers their chance to shine, after a period where running with the herd and using passive investment strategies has worked so well.
Source: LSEG Refinitiv data, Marketscreener, analysts’ consensus, London Stock Exchange. 2026 data as of 7 January 2026.
“A wave of bids, especially from overseas buyers, coupled with a surge in buyback activity since 2022, seems to have emboldened analysts when it came to championing the cause of UK equities as a source of both value and income. Analysts have become progressively more bullish over the past four years.
“This is also understandable in the context of how mood tends to follow price, and the FTSE 100 is now trading above 10,000 for the first time in its history. Further all-time highs could stoke further confidence and fresh interest in the still much-maligned UK equity market, especially as the rising percentage of ‘buy’ recommendations and falling percentage of negative ratings is finally translating into strong positive returns on an absolute basis, and also now relative to the preciously all-conquering US markets.
“Confidence may also be high because analysts’ top picks outperformed the headline UK equity benchmarks for the third year in a row in 2025. Their least preferred names also obliged as they lagged the wider market, to give further credence to the benefits of diligent research and careful stock picking.
“Analysts’ top picks failed to beat the FTSE 100 index in 2015, 2016, 2017, 2018, 2020, 2021 and 2022. However, they have done so in 2023, 2024 and now 2025, to repeat the success of 2019. Thumping gains from Prudential, Barclays and Games Workshop helped the 10 most popular stocks, as ranked by the percentage of ‘buy’ or ‘outperform’ ratings attributed to them compared to the total number of recommendations, to generate a total return of 27.6%, and thus beat the 25.8% provided by the FTSE 100 itself.
“The 10 least popular stocks, defined by the percentage of ‘sell’ or ‘underperform’ ratings attributed to them compared to the total number of recommendations, did much worse than the FTSE 100 to complete a welcome double for the analysts’ community.
“These 10 names generated a positive total return of just 4.2% in 2025, to comfortably undershoot the 25.8% positive total return offered by the FTSE 100. Analysts even managed to identify five stocks which fell during the year, no mean feat during a bull run to a new high, in the shape of Rightmove, Auto Trader, Diageo, Bunzl and WPP. The last-named stock even fell out of the index at the end of the year after a shocking run, a profit warning and the departure of its chief executive.
“It is easy to poke fun of analysts, not least because picking individual stocks is hard, even if it is your full-time job. Markets will tend to do what causes the greatest degree of surprise and analysts do not intentionally set out to sit on the fence. Their views and research shape the debate and help to form opinion, but markets will price in the prevailing consensus pretty quickly. What analysts try to do, and investors must do, is assess what the possible upside and downside surprises to the consensus could be, which is more likely, and what the impact upon a stock could be. Only then can risk and reward be properly measured.
“At least 2025’s results give credence to the case that analysts’ research can provide some genuine added value.
Source: LSEG Refinitiv data, Marketscreener, analysts’ consensus, London Stock Exchange. 2025 analysts’ recommendations data as of 10 January 2025.
“Analysts will take a little less satisfaction from how their labours worked out across the FTSE 350. When it came to the broader index, the most popular selections markedly underperformed the index, and actually fell in value in aggregate, and the least popular picks contrived to marginally outperform.
“WAG Payment Systems helped to boost the bulls, but Essentra, Spire Healthcare and Auction Technology tripped them up, even if a bid for the last-named suggested they may have been on to something. Bearish views on a range of financial stocks, including fund managers Ninety One and Ashmore, come unstuck, although even this spoke of how perhaps some faith had returned to the skills of stock selection relative to passive, index and basket-following strategies.
Source: LSEG Refinitiv data, Marketscreener, analysts’ consensus, London Stock Exchange. 2025 analysts’ recommendations data as of 10 January 2025.
“The ultimate conclusion still probably has to be that broker research needs to be treated with a degree of caution (assuming that investors can get their hands on it in the first place), certainly in the cases where stocks seem universally popular.
“Anyone prepared to pick their own stocks rather than pay a fund manager or index-tracker fund to do it for them simply must do their own research on individual companies before they even think about buying or selling any of its shares. In sum, Warren Buffett (still) seems spot on with his observation that, ‘you cannot buy what is popular and do well.’
“The ongoing enthusiasm for the Magnificent Seven in America and AI-related stocks worldwide will put that to the test once more in 2026 and, closer to home, investors might like to know which stocks are most liked – and disliked – by analysts at the start of this year. The two tables below list the names which investors may wish to analyse in greater depth, or simply avoid altogether, depending upon their view of the value of the research provided.”
Source: LSEG Refinitiv data, Marketscreener, analysts’ consensus, London Stock Exchange. Data as of 10 January 2025.
Source: LSEG Refinitiv data, Marketscreener, analysts’ consensus, London Stock Exchange. Data as of 7 January 2026.
