Will these FTSE 100 shares soar in 2026 on these good omens?
The FTSE 100 has enjoyed a strong start to 2026. It’s up 5% since 1 January, which means — over a 12-month horizon — the UK’s premier share index has risen a whopping 20% in value.
Judging from recent news flow, I think these top FTSE companies could keep soaring. Want to know why?
Babcock International
Babcock International (LSE:BAB) shares are up 112% during the last year. Yet due to years of underperformance, it still looks dirt cheap compared to the broader defence market.
I think this could underpin further share price gains, and especially given the bright outlook for London’s weapons builders. Babcock shares trade on a forward price-to-earnings (P/E) ratio of 20.9 times. That’s below the average of 32 for Europe’s broader defence sector.
A statement from UK leader Keir Starmer on Monday (16 February) provided more encouragement for investors. The prime minister said Britain must “go faster” on defence spending, following reports at the weekend that the government is planning to hike defence spending to 3% of GDP by 2029. That’s up from 2.4% last year.
Babcock is a major supplier to British armed forces and, thanks to its market-leading capabilities, makes roughly three-quarters of sales from these shores. It’s therefore well placed to capitalise on rising UK defence budgets, though investors should remember that supply chain issues and competitive pressures could hamper its performance.
Babcock’s certainly making a good fist of things so far. Operating profit jumped 27% in the first half, and the firm announced in January that it’s “seen a continuation of the strong performance reported at the half year“. Progress in the civil sector with projects like building new nuclear power plants is providing an added (and substantial) bonus.
Persimmon
I also believe Persimmon (LSE:PSN) — whose shares have soared 22% in value over one year — could continue to climb. That’s even though news from industry peers has been pretty mixed of late.
Barratt Redrow‘s profits missed expectations last week, spooking the market and sending its share price lower. But just a few days earlier Bellway said it had enjoyed “clear signs of improving customer demand in the early weeks of the current spring selling season“. For investors, the picture is clear as mud, right?
Not quite. In fact, I’m confident Persimmon’s fortunes will mirror Bellway’s more closely than FTSE 100 rival Barratt. This is thanks to its focus on entry-level and mid-market properties, demand for which is more resilient in tough times. News that completions here rose 12% in 2025 and ahead of forecasts illustrates the firm’s durability.
Lending conditions for first-time buyers — a key demographic for Persimmon — have picked up strongly. And latest news on this front is highly encouraging. The number of mortgage products on offer for maiden homebuyers are at their highest since 2008, it was announced last week. Further interest rate cuts are also likely which will boost buyer affordability across the board.
The housebuilder’s momentum might hit the buffers if the UK economy hits a fresh downturn. But on balance, I’m confident Persimmon’s profits could rise strongly over the next year, leading to further share price gains.
The post Will these FTSE 100 shares soar in 2026 on these good omens? appeared first on The Motley Fool UK.
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Royston Wild has positions in Barratt Redrow and Persimmon Plc. The Motley Fool UK has recommended Barratt Redrow and Persimmon 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.
