Burberry, easyJet and more: The Evening Standard City desk’s FTSE share tips for 2022

·5-min read
 (Burberry)
(Burberry)

Clipper Logistics

Tipped by Oscar Williams-Grut, Business editor

What’s the outlook for the UK in 2022? After a rocky couple of years, it’s hard to tell.

One thing seems certain though: people will keep buying more and more stuff online.

As long as they do, somebody will have to figure out how to get it to them (oh, and how to do troublesome returns).

That’s why my pick for the year is Clipper Logistics, which specialises in helping retailers in the *gulp* multi-channel world (shops AND the web).

It works with firms such as JD Sports and Halfords, and revenue was up 40% last year and 33% at the half-year.

Tipped at 716p

Life Science REIT

Tipped by Joanna Hodgson (née Bourke), Deputy business editor

While some commercial landlords will continue to face pandemic disruption, this newly floated property firm should be in line for steady rental income and a flurry of new occupiers.

Life Science REIT, which joined London’s junior AIM market in November, owns buildings to house research and development companies.

It plans to buy more sites in Oxford, Cambridge and London.

A record £3 billion was raised by the UK biotech and life sciences sector in the first three quarters of 2021, and that will help the best and brightest of those to expand, meaning more demand for space.

Tipped at 102.25p

Burberry

Tipped by Simon Freeman, City news editor

Three words will define 2022: inflation, inflation, and inflation. Thankfully, there’s one demographic immune to the looming cost-of-living crisis — and they love expensive shoes and handbags.

At 1820p a share, Burberry too is “reassuringly expensive” but that’s still a chunky 21% off the pre-pandemic price.

Free cash flow is strong, net debt is down, dividends are flowing and a share buyback is in the works.

Shops, runway shows and international tourism are all back, while a sharper e-commerce offering has tapped into surprising new markets.

Incoming CEO Jonathan Akeroyd’s experience from Versace will accelerate his predecessor Marco Gobbetti’s push upmarket, while creative chief Riccardo Tisci’s glorious SS22 Animal Instinct collection suggests he’s having a ball.

In the Chinese Year of the Tiger, Burberry’s animal spirits will roar.

Tipped at 1820p

Lloyds Bank

Tipped by Simon English, Senior City Correspondent

With interest rates now seemingly certain to rise (though we have been here before) there’s a strong case for buying shares in any mainstream lender (ditto).

Tipping shares in Lloyds Bank has proved to be folly for at least the past five years, but I’m going for it.

Losses from Covid loans will be less than the City once feared and Lloyds is good at cost management.

It throws off lots of cash which should turn into dividends or share buybacks.

Lloyds has always been a bet on the UK economy, so you have to think we are going to come out of Covid in reasonably strong shape this year. I do.

Tipped at 52p

Time for take off? (easyjet)
Time for take off? (easyjet)

easyJet

Tipped by Lucy Tobin

I must be writing this in a rare “optimistic for 2022 mood” – I’m tipping easyJet.

Hoping that Omicron remains less vicious and wipes out any dominance by its nastier variants, I’m considering this is the year where the pandemic fades and Britons get travelling again.

The appetite is there and would-be holiday-makers want to jet off. EasyJet shares are still well off their 1270p pre-pandemic level and whilst oil prices, inflation and Covid promise a turbulent ride, I’m hoping it’s one that’ll take off in 2022.

Tipped at 624p

Studio Retail Group

Tipped by Jonathan Prynn, Consumer business editor

Studio Retail Group, the online value retailer that sells fashion and homewares and delivers nine million parcels per year in the UK, had a torrid time last autumn when it issued a profits warning as shoppers flooded back to the High Street.

Its shares slumped and are still trading at two and a half year lows.

But with the cost of living — particularly energy bills — and taxes sharply rising over the coming months, 2022 will be the year of the big squeeze on consumer spending.

Value retailers will be perfectly placed to benefit.

Tipped at 162p

GB Group

Tipped by Graeme Evans, Markets reporter

GB Group’s digital ID and location verification services help over 20,000 organisations, including Barclays, Volvo and IBM, to reduce the risk of fraud and financial crime and speed up customer onboarding.

Checks on US stimulus payments and crypto transactions boosted 2021 revenues and it continues to benefit from retail’s online shift.

December’s £547 million swoop for LA-based Acuant has the scope to be a game-changer, but shares came under pressure after some of the deal was funded through an equity issue.

The AIM-listed stock trades on about 27 times 2022 earnings, below the global tech sector.

Tipped at 696.5p

Chewy

Tipped by Ludovic, the City desk cat

Vegan food is going to be an investment theme this year — including vegan food for pets.

Since it’s a relatively new market, there aren’t very many pure vegan pet food plays on the stock market.

So I think the obvious thing to do is buy shares in a traditional petfood company and trust that it will wake up to the surging demand for vegan food for dogs and cats. (The profit margins are also tasty.)

One I like is Chewy, which is listed in New York.

The shares have nearly halved this year — yes, it is in the doghouse — but that just looks like a buying opportunity.

It is also a solid, large business worth about $22 billion just now.

It has sales of about $2 billion a quarter — you can get the products in the UK from the web.

Rising pet ownership is not just a fad. You love us.

Tipped at $51.11

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