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Nov. 8, 2021, 9:42 a.m. EST

It’s time to buy U.K. stocks. Here are the 25 stocks to scoop up, says JPMorgan.

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By Barbara Kollmeyer

You’ve been down too long.

That is the latest view from JPMorgan Chase & Co. analysts on U.K. stocks, as the bank ended a longstanding cautious view on the region, upgrading it to overweight. A team led by Mislav Matejka, head of global equity strategy, explained why investors should be ready to take advantage of the fact the FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.27% has lagged behind its global peers for six years.

U.K. equities have trailed a cumulative 50% against the U.S. and 24% versus the eurozone since the Brexit referendum in 2016, opening up a record discount both on price to earnings and a price to book basis, said Matejka and the team. That is even after stripping out heavily weighted banks and energy sectors.

And while U.K. equities have historically shown a “clear inverse correlation to bond yield direction,” that is no longer the case. “The 2-year rolling correlation between UK relative performance and bond yields has flipped into positive territory. This suggests that any potential increase in bond yields may not be a constraint for the relative performance of UK equities,” said Matejka and the team

Neither should it be a problem that the Bank of England is also about to start raising interest rates, as increasingly hawkish policy won’t continue to be the case. Also J.P. Morgan sees an easing of pressures over labor supply and power prices, with gas prices down 35% from October highs.

As for their preferences, they are switching a long-held preference for FTSE 250 stocks over the FTSE 100, as they think the latter, with its big representation of exporters, could perform better. And the U.K. offers the highest dividend yield out of all regions, the researchers note.

Here are their top 25 U.K. names: ITV /zigman2/quotes/205378065/delayed UK:ITV -3.86% , WPP /zigman2/quotes/202300097/delayed UK:WPP +0.78% /zigman2/quotes/203813176/composite WPP +0.84% , Babcock /zigman2/quotes/200965934/delayed UK:BAB +0.67% , Lloyds /zigman2/quotes/200709414/composite LYG +0.66% /zigman2/quotes/202285510/delayed UK:LLOY -0.22% , Barclays /zigman2/quotes/208409333/delayed UK:BARC +1.61% /zigman2/quotes/206581728/composite BCS +1.39% , Travis Perkins /zigman2/quotes/200858511/delayed UK:TPK -0.45% , Melrose /zigman2/quotes/210306391/delayed UK:MRO +2.38% , IMI /zigman2/quotes/203470444/delayed UK:IMI +1.86% , Victrex /zigman2/quotes/202943820/delayed UK:VCT +0.93% , Intermediate Capital Group /zigman2/quotes/206004854/delayed UK:ICP +1.69% , Shell , Tesco /zigman2/quotes/203761082/delayed UK:TSCO +0.19% , AstraZeneca /zigman2/quotes/203048482/delayed UK:AZN +0.32% /zigman2/quotes/203048482/delayed UK:AZN +0.32% , Taylor Wimpey /zigman2/quotes/208623755/delayed UK:TW -0.69% , Royal Mail /zigman2/quotes/204213037/delayed UK:RMG -1.92% , Glencore /zigman2/quotes/201400686/delayed UK:GLEN +1.35% , DS Smith /zigman2/quotes/208795576/delayed UK:SMDS +1.51% , British Land /zigman2/quotes/210491538/delayed UK:BLND +0.11% , Grainger /zigman2/quotes/203845572/delayed UK:GRI +1.69% , JD Sports /zigman2/quotes/207007202/delayed UK:JD +0.67% , Reckitt /zigman2/quotes/206856088/delayed UK:RKT -0.97% , Imperial Brands /zigman2/quotes/208789104/delayed UK:IMB +0.53% , Britvic /zigman2/quotes/208055220/delayed UK:BVIC +0.67% , BT Group /zigman2/quotes/209006687/delayed UK:BT.A -0.70% and Centrica /zigman2/quotes/205228367/delayed UK:CNA -2.40% .

As for Monday’s action, the FTSE 100 was flat at 7,300, with pharmaceuticals gaining and banks and miners weaker. Travel stocks failed to get a bid from the reopening of trans-Atlantic travel routes for fully vaccinated foreign travelers . Shares of International Consolidated Airlines /zigman2/quotes/208070069/delayed UK:IAG +1.30% fell 2% and easyJet /zigman2/quotes/202825892/delayed UK:EZJ +1.41% shares fell 1.7%.

The British pound /zigman2/quotes/210561263/realtime/sampled GBPUSD +0.1904% rose 0.4% to $1.3548.

/zigman2/quotes/210598409/delayed
UK : FTSE UK
7,585.46
+20.54 +0.27%
Volume: 579,898
May 27, 2022 4:57p
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/zigman2/quotes/205378065/delayed
UK : U.K.: London
70.64 p
-2.84 -3.86%
Volume: 16.70M
May 27, 2022 4:35p
P/E Ratio
7.57
Dividend Yield
4.67%
Market Cap
£2.94 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/202300097/delayed
UK : U.K.: London
926.40 p
+7.20 +0.78%
Volume: 1.90M
May 27, 2022 4:35p
P/E Ratio
17.13
Dividend Yield
3.37%
Market Cap
£10.02 billion
Rev. per Employee
£117,031
loading...
/zigman2/quotes/203813176/composite
US : U.S.: NYSE
$ 58.53
+0.49 +0.84%
Volume: 117,713
May 27, 2022 4:00p
P/E Ratio
15.74
Dividend Yield
3.62%
Market Cap
$12.59 billion
Rev. per Employee
$160,953
loading...
/zigman2/quotes/200965934/delayed
UK : U.K.: London
332.20 p
+2.20 +0.67%
Volume: 403,803
May 27, 2022 4:35p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
£1.67 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/200709414/composite
US : U.S.: NYSE
$ 2.28
+0.02 +0.66%
Volume: 3.18M
May 27, 2022 4:00p
P/E Ratio
5.52
Dividend Yield
4.48%
Market Cap
$39.38 billion
Rev. per Employee
$997,086
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/zigman2/quotes/202285510/delayed
UK : U.K.: London
45.24 p
-0.10 -0.22%
Volume: 99.55M
May 27, 2022 4:35p
P/E Ratio
6.06
Dividend Yield
4.42%
Market Cap
£31.32 billion
Rev. per Employee
£724,994
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/zigman2/quotes/208409333/delayed
UK : U.K.: London
170.38 p
+2.70 +1.61%
Volume: 44.88M
May 27, 2022 4:35p
P/E Ratio
N/A
Dividend Yield
3.52%
Market Cap
£28.06 billion
Rev. per Employee
£276,176
loading...
/zigman2/quotes/206581728/composite
US : U.S.: NYSE
$ 8.74
+0.12 +1.39%
Volume: 3.99M
May 27, 2022 4:00p
P/E Ratio
N/A
Dividend Yield
3.58%
Market Cap
$35.28 billion
Rev. per Employee
$377,068
loading...
/zigman2/quotes/200858511/delayed
UK : U.K.: London
1,213.00 p
-5.50 -0.45%
Volume: 2.31M
May 27, 2022 4:35p
P/E Ratio
10.21
Dividend Yield
3.13%
Market Cap
£2.53 billion
Rev. per Employee
£229,473
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/zigman2/quotes/210306391/delayed
UK : U.K.: London
129.00 p
+3.00 +2.38%
Volume: 9.33M
May 27, 2022 4:35p
P/E Ratio
N/A
Dividend Yield
1.36%
Market Cap
£5.51 billion
Rev. per Employee
£171,877
loading...
/zigman2/quotes/203470444/delayed
UK : U.K.: London
1,366.00 p
+25.00 +1.86%
Volume: 289,777
May 27, 2022 4:35p
P/E Ratio
18.65
Dividend Yield
1.73%
Market Cap
£3.49 billion
Rev. per Employee
£166,118
loading...
/zigman2/quotes/202943820/delayed
UK : U.K.: London
1,733.00 p
+16.00 +0.93%
Volume: 62,262
May 27, 2022 4:35p
P/E Ratio
21.53
Dividend Yield
3.44%
Market Cap
£1.49 billion
Rev. per Employee
£364,319
loading...
/zigman2/quotes/206004854/delayed
UK : U.K.: London
1,596.00 p
+26.50 +1.69%
Volume: 623,454
May 27, 2022 4:35p
P/E Ratio
9.15
Dividend Yield
4.76%
Market Cap
£4.49 billion
Rev. per Employee
£2.03M
loading...
/zigman2/quotes/203761082/delayed
UK : U.K.: London
258.50 p
+0.50 +0.19%
Volume: 24.89M
May 27, 2022 4:38p
P/E Ratio
13.31
Dividend Yield
4.22%
Market Cap
£19.38 billion
Rev. per Employee
£177,294
loading...
/zigman2/quotes/203048482/delayed
UK : U.K.: London
10,580.00 p
+34.00 +0.32%
Volume: 1.11M
May 27, 2022 4:35p
P/E Ratio
N/A
Dividend Yield
1.99%
Market Cap
£163.41 billion
Rev. per Employee
£367,302
loading...
/zigman2/quotes/203048482/delayed
UK : U.K.: London
10,580.00 p
+34.00 +0.32%
Volume: 1.11M
May 27, 2022 4:35p
P/E Ratio
N/A
Dividend Yield
1.99%
Market Cap
£163.41 billion
Rev. per Employee
£367,302
loading...
/zigman2/quotes/208623755/delayed
UK : U.K.: London
130.25 p
-0.90 -0.69%
Volume: 8.67M
May 27, 2022 4:35p
P/E Ratio
8.56
Dividend Yield
6.59%
Market Cap
£4.66 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/204213037/delayed
UK : U.K.: London
321.00 p
-6.30 -1.92%
Volume: 2.49M
May 27, 2022 4:35p
P/E Ratio
3.68
Dividend Yield
6.23%
Market Cap
£3.13 billion
Rev. per Employee
£74,589
loading...
/zigman2/quotes/201400686/delayed
UK : U.K.: London
526.20 p
+7.00 +1.35%
Volume: 22.58M
May 27, 2022 4:35p
P/E Ratio
19.32
Dividend Yield
3.92%
Market Cap
£67.74 billion
Rev. per Employee
£1.09M
loading...
/zigman2/quotes/208795576/delayed
UK : U.K.: London
309.10 p
+4.60 +1.51%
Volume: 2.57M
May 27, 2022 4:35p
P/E Ratio
17.54
Dividend Yield
4.17%
Market Cap
£4.19 billion
Rev. per Employee
£223,427
loading...
/zigman2/quotes/210491538/delayed
UK : U.K.: London
526.20 p
+0.60 +0.11%
Volume: 2.07M
May 27, 2022 4:35p
P/E Ratio
72.08
Dividend Yield
4.17%
Market Cap
£4.87 billion
Rev. per Employee
£534,392
loading...
/zigman2/quotes/203845572/delayed
UK : U.K.: London
312.20 p
+5.20 +1.69%
Volume: 764,783
May 27, 2022 4:35p
P/E Ratio
15.36
Dividend Yield
1.73%
Market Cap
£2.27 billion
Rev. per Employee
£869,876
loading...
/zigman2/quotes/207007202/delayed
UK : U.K.: London
119.95 p
+0.80 +0.67%
Volume: 10.29M
May 27, 2022 4:35p
P/E Ratio
14.49
Dividend Yield
0.24%
Market Cap
£6.15 billion
Rev. per Employee
£122,978
loading...
/zigman2/quotes/206856088/delayed
UK : U.K.: London
6,118.00 p
-60.00 -0.97%
Volume: 1.39M
May 27, 2022 4:35p
P/E Ratio
N/A
Dividend Yield
2.85%
Market Cap
£44.17 billion
Rev. per Employee
£253,026
loading...
/zigman2/quotes/208789104/delayed
UK : U.K.: London
1,797.00 p
+9.50 +0.53%
Volume: 1.19M
May 27, 2022 4:35p
P/E Ratio
6.01
Dividend Yield
7.76%
Market Cap
£16.99 billion
Rev. per Employee
£546,634
loading...
/zigman2/quotes/208055220/delayed
UK : U.K.: London
828.00 p
+5.50 +0.67%
Volume: 429,256
May 27, 2022 4:36p
P/E Ratio
21.46
Dividend Yield
3.08%
Market Cap
£2.20 billion
Rev. per Employee
£333,753
loading...
/zigman2/quotes/209006687/delayed
UK : U.K.: London
184.25 p
-1.30 -0.70%
Volume: 18.54M
May 27, 2022 4:35p
P/E Ratio
14.74
Dividend Yield
4.18%
Market Cap
£18.40 billion
Rev. per Employee
£209,077
loading...
/zigman2/quotes/205228367/delayed
UK : U.K.: London
77.24 p
-1.90 -2.40%
Volume: 32.32M
May 27, 2022 4:35p
P/E Ratio
7.79
Dividend Yield
0.00%
Market Cap
£4.63 billion
Rev. per Employee
£685,640
loading...
/zigman2/quotes/208070069/delayed
UK : U.K.: London
130.48 p
+1.68 +1.30%
Volume: 20.18M
May 27, 2022 4:35p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
£6.39 billion
Rev. per Employee
£128,176
loading...
/zigman2/quotes/202825892/delayed
UK : U.K.: London
532.00 p
+7.40 +1.41%
Volume: 2.43M
May 27, 2022 4:35p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
£3.97 billion
Rev. per Employee
£112,154
loading...
/zigman2/quotes/210561263/realtime/sampled
US : Tullett Prebon
1.2631
+0.0024 +0.1904%
Volume: 0.0000
May 27, 2022 4:07p
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