2 shares smashing all-time highs as the FTSE 100 peaks

This investor takes a look at a pair of high-quality FTSE 100 stocks that have reached new records since the start of the year.

| More on:

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

The FTSE 100 has had a great start to the year, rising nearly 5% to reach a record level. So it’s hardly surprising to see a few Footsie shares also pushing skywards into uncharted territory.

Here are two that have started 2025 the way they ended 2024 — going up!

On a roll again

First is Rolls-Royce (LSE: RR), which gained over 90% last year and closed at a record 611p earlier this month. It’s pulled back slightly to 592p, as I write, but that’s still higher than where it started the year (568p).

Should you invest £1,000 in Intercontinental Hotels Group Plc right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Intercontinental Hotels Group Plc made the list?

See the 6 stocks

Created with Highcharts 11.4.3Rolls-Royce Plc PriceZoom1M3M6MYTD1Y5Y10YALL30 Jan 202030 Jan 2025Zoom ▾Jul '20Jan '21Jul '21Jan '22Jul '22Jan '23Jul '23Jan '24Jul '24Jan '2520212021202220222023202320242024www.fool.co.uk

Beyond the recovery in international travel, the company continues to benefit from elevated defence spending. Last week, Rolls bagged its biggest ever deal, a £9bn contract with the Ministry of Defence to make nuclear submarine reactors for the Royal Navy.

There’s also growing excitement about its small modular reactors (SMR) business. Last year, it won a landmark contract to help deploy these mini-nuclear reactors in the Czech Republic. It may land a contract to do the same in the UK too — the long-delayed decision is expected in the spring.

With nations wanting to decarbonise energy systems, and more data centres needed to support power-hungry AI systems, the global SMR market could be huge.

However, it’s also one that is a few years away (2030s). In the meantime, the firm faces supply chain challenges and sky-high expectations from investors. It remains to be seen whether the share price will surge for a third year in a row.

Longer term, however, I’m bullish on this blue-chip. The global fleet of long-haul aircraft is expected to expand significantly in the coming decades, particularly in Asia. The growth opportunities should be plentiful for the FTSE 100 engine maker.

That said, with the stock trading a high price-to-earnings (P/E) ratio of 32 for 2024, I’m not keen on adding to my holding at the moment.

Scaling up rapidly

Next is InterContinental Hotels Group (LSE: IHG). The share price is up 130% over the past five years, leaving it near its all-time high at just under 10,800p.

Created with Highcharts 11.4.3InterContinental Hotels Group Plc PriceZoom1M3M6MYTD1Y5Y10YALL30 Jan 202030 Jan 2025Zoom ▾Jul '20Jan '21Jul '21Jan '22Jul '22Jan '23Jul '23Jan '24Jul '24Jan '2520212021202220222023202320242024www.fool.co.uk

Like Rolls-Royce, InterContinental is another global company, with a growing hotel presence across Europe, Asia, and the Americas. Its capital-light franchising model is enabling it to scale quickly, especially in high-demand markets across Asia, where it is leveraging local partners’ resources and market knowledge. 

This is a stock I’ve wanted to buy for some time now, but the seemingly high valuation has put me off. Right now, the P/E ratio for 2024 is around 30.

Arguably, that valuation fails to account for the risks of a potential trade war and rising inflation that might be triggered by Donald Trump’s proposed tariffs. That could hit disposable income and therefore demand for travel and hotels.

Again though, I’m optimistic about this stock moving forward. There’s a big pushback on short-term rentals on Airbnb in many major cities, which should ultimately play into the firm’s hands.

The company owns a diverse portfolio of hotel brands, including the luxury InterContinental Hotels & Resorts, the mid-range Holiday Inn, and boutique Kimpton. I see it as one of the highest-quality businesses in the FTSE 100 and expect it to carry on doing very well.

As soon as there’s a significant dip, I plan to invest.

Investing in AI: 3 Stocks with Huge Potential!

🤖 Are you fascinated by the potential of AI? 🤖

Imagine investing in cutting-edge technology just once, then watching as it evolves and grows, transforming industries and potentially even yielding substantial returns.

If the idea of being part of the AI revolution excites you, along with the prospect of significant potential gains on your initial investment…

Then you won't want to miss this special report inside Motley Fool Share Advisor – 'AI Front Runners: 3 Surprising Stocks Riding The AI Wave’!

And today, we're giving you exclusive access to ONE of these top AI stock picks, absolutely free!

Get your free AI stock pick

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Ben McPoland has positions in Rolls-Royce Plc. The Motley Fool UK has recommended Airbnb, InterContinental Hotels Group Plc, 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.

More on Investing Articles

Investing Articles

As Lloyds launches a £1.7bn buyback, is the share price too cheap to ignore?

Car loan mis-selling and a full-year profit miss combine to push the Lloyds share price up after FY results. It…

Read more »

A pastel colored growing graph with rising rocket.
Investing Articles

Here’s how investors could target £4,973 in passive income from a £10,000 holding in this FTSE 250 media gem

This FTSE 250 firm generates a very good yield that I think might deliver exceptional returns over time. And it…

Read more »

Arrow symbol glowing amid black arrow symbols on black background.
Investing Articles

Down 21% from May despite excellent Q4 2024 results, is GSK’s share price an irresistible bargain to me now?

GSK’s share price has fallen a long way on a combination of factors, but do its recent strong results leave…

Read more »

Investor looking at stock graph on a tablet with their finger hovering over the Buy button
Investing Articles

Which would I buy today, the FTSE 100 or the S&P 500?

The UK's FTSE 100 and US S&P 500 indexes are both trading near record highs. But US stocks look expensive…

Read more »

Investing Articles

I’m in 2 minds about the Vodafone share price. What should I do?

With the Vodafone share price seemingly stuck in a never-ending loop of doom, our writer’s thinking about selling up. But…

Read more »

Investing Articles

£10,000 invested in Greggs shares 10 years ago is now worth…

Greggs shares have performed well over the long run, but recently performance isn’t impressive. Dr James Fox explores the waning…

Read more »

Investing Articles

With a 9.5% yield, could this FTSE 250 share be a dividend gold mine?

Christopher Ruane is eyeing a FTSE 250 with a dividend yield approaching double digits. Here's what he likes about it…

Read more »

Investing Articles

2 key reasons Nvidia stock could still soar from here

Even after the chipmaker's stunning performance in recent years, this writer sees reasons that could potentially help propel its share…

Read more »