Shares for the future: what 2026 might hold for this top 5 stock
It’s one of analyst Richard Beddard’s favourite shares, and he wanted this article to be a celebration. But things are more nuanced. Here’s what he thinks of prospects.
19th December 2025 15:00
by Richard Beddard from interactive investor
Happy Christmas! Since this is my last article before the holiday, I had hoped to bring you glad tidings.
Sadly, my research led me to a slightly different place. I have good news, and maybe not such good news concerning my favourite holiday airline, Jet2 Ordinary Shares (LSE:JET2).
Jet2: Gatwick for growth
When I scored Jet2 in September, I worried that 85% of the UK population lives within one and a half hour’s drive from one of its bases.
The airline flew its first passengers from Leeds Bradford Airport to Amsterdam in 2002. Since then, it has added 12 more UK bases and at least 75 more destinations, mostly in the Mediterranean. Along the way, it helped put venerable Thomas Cook out of business, and stole market leadership from TUI AG (XETRA:TUI1) to become the nation’s biggest package tour operator.
More passengers fly on Jet2 without taking a holiday, but in 2025 80% of Jet2’s revenue was from its package holiday arm Jet2holidays.
Under ATOL, the licence scheme for package tours, Jet2holidays is authorised to carry over seven million passengers. Its nearest rival, TUI is authorised to carry just under six million. Coming up fast is easyJet holidays, licensed to carry nearly 3.5 million.
Running an airline is incredibly complicated, but, from the outside, growth has come easily as Jet2 has rolled out bases and flown more routes from them. As it has expanded, Jet2 has taken market share by treating customers better than they have become accustomed to being treated in the budget airline era.
Today, Jet2 flies from 13 of the 18 UK airports that fly more than a million passengers a year. You can fly Jet2 from Bournemouth and Bristol in the South West to Belfast, Edinburgh and Glasgow in the North.
The proliferation of bases across the UK was the source of my concern, but I was missing the big obvious gap in the most populated corner of the nation, the South East, which is only partially served by bases at Stansted, Luton, and Bournemouth, the smallest airport by annual passenger numbers that Jet2 flies from.
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In December, Jet2 announced that it has secured slots for six aircraft at Gatwick, addressing a catchment of 15 million people within one hour of the airport by road or rail.
Slots give airlines permission to use airport infrastructure at a particular date or time. Airport slots are hard to come by at Gatwick and airlines sometimes trade them for millions of pounds.
It seems Jet2 lucked out though when Gatwick released additional capacity recently. This prompts the airline to bring forward its aspiration to fly from the country’s leading airport for short-haul beach holidays and city breaks.
Flights will start in March next year, but start-up costs mean that Gatwick will only move into profitability in 2029, according to Jet2’s forecasts. Jet2, and consequently shareholders, are sacrificing profit now, probably for much more profit in future.
Jet2 will keep five planes at Gatwick and one serving routes from Gatwick abroad, which pales compared to easyJet (LSE:EZJ)’s 70-odd planes stationed there. But this is only the beginning, a “strong strategic foothold” according to Jet2, now that a second runway has been approved by the government and more slots will eventually become available.
Not so EZJ
The move into easyJet’s largest base, though, has shone a light for me on the growing rivalry between easyJet holidays and Jet2holidays.
EasyJet relaunched easyJet holidays as an in-house operation in 2019, taking control of relationships with hotels and resorts like Jet2 does. Formerly the package holiday operation was outsourced to a partner bedbank (hotel room wholesaler). After a tricky start due to the pandemic, easyJet holidays has grown strongly.
It’s hard for me to put aside my prejudices. easyJet holidays uses easyJet’s scheduled flights, which have let me down badly three times. Jet2 has never let me down and routinely trumpets the awards and statistics that show it very rarely lets other people down too.
I wanted today’s article to be a celebration, and perhaps even deliver an early Christmas present by upscoring Jet2, but as is so often the case in investing, things are more nuanced.
We cannot ignore the competitive threat of package tour holidays from easyJet. It has slots, planes and a large pool of passengers to sell holidays to. I don’t think easyJet holidays will be as trouble-free in aggregate as Jet2holidays, but that may not matter to some customers.
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I believe all three of the ATOL package tour operators that actually fly their own planes and deal directly with resorts and hotels are taking market share from the rest of the market, which also includes online travel agents such as On The Beach Group (LSE:OTB).
But despite the potential for growth at Gatwick, it may be that Jet2 discovers the competition is a bit stiffer than it has been in the past.
One worry recedes, another emerges. I have reworded the table, but I haven’t changed Jet2’s score.
Jet2 | JET2 | Package tour operator and leisure airline | 16/12/2025 | 8/10 |
How capably has Jet2 made money? | 3.0 | |||
Jet2 has grown revenue and profit at double-digit compound annual growth rates (CAGR) by flying more people to more places from more UK airports. Its long-standing executives have largely self-funded growth by controlling much of the holiday experience and putting staff and customers first, encouraging loyalty. | ||||
How big are the risks? | 1.5 | |||
Like all airlines, Jet2 is vulnerable to external events such as war, pandemic and the many risks of climate change. Its singular focus on family friendly holidays in the Med has seen off competitors, but a resurgent easyJet holidays may be a more potent threat. | ||||
How fair and coherent is its strategy? | 2.5 | |||
The next stage in Jet2's expansion is Gatwick, perhaps its biggest opportunity. It is buying fuel-efficient planes, electrifying the ground fleet and lobbying for more Sustainable Aviation Fuels (SAF) and efficient routes. This isn't enough to address the many risks of climate change, but progress may have to come collaboratively. | ||||
How low (high) is the share price compared to normalised profit? | 1.0 | |||
Low. A share price of 1,359p values the enterprise at £2,655 million, about 11 times normalised profit. | ||||
NB: Bold text indicates factors that reduce the score. Bold and italicised text doubly so. The maximum score is 3 for each criterion except price, which has a maximum of 1 (explainedhere) | ||||
30 Shares for the future
Here is the ranked list of Decision Engine shares. I review the scores at least once a year, soon after each company has published its annual report. The price scores are calculated using the share price prior to publication.
Generally, I consider shares that score more than 5 out of 10 to be worthy of long-term investment in sizes determined by the ideal holding size (ihs%).
My next article will be published during the holiday period and will not contain the Decision Engine. Normal service will resume early in the new year.
company | description | score | qual | price | ih% | |
1 | FW Thorpe | Makes lighting systems for commercial, industrial and public settings | 9.0 | 0.8 | 9.6% | |
2 | Howden Joinery | Supplies kitchens to small builders | 8.0 | 0.6 | 7.2% | |
3 | James Latham | Distributes imported panel products, timber, and laminates | 7.5 | 1.0 | 7.0% | |
4 | Bunzl | Distributes essential everyday items consumed by organisations | 7.5 | 0.5 | 6.1% | |
5 | Jet2 | Package tour operator and leisure airline | 8.0 | 7.0 | 1.0 | 6.0% |
6 | Solid State | Manufactures electronic systems and distributes components | 7.0 | 1.0 | 5.9% | |
7 | Softcat | Sells software and hardware to businesses and public sector | 7.5 | 0.4 | 5.8% | |
8 | Cohort | Manufactures/supplies defence tech, training, consultancy | 8.0 | -0.4 | 5.1% | |
9 | Hollywood Bowl | Operates tenpin bowling centres | 7.5 | 0.0 | 5.1% | |
10 | Churchill China | Manufactures tableware for restaurants etc. | 6.5 | 1.0 | 5.0% | |
11 | Bloomsbury Publishing | Publishes books and educational resources | 7.5 | 0.0 | 5.0% | |
12 | Renew | Maintenance and improvement of national infrastructure | 7.5 | 0.0 | 5.0% | |
13 | Oxford Instruments | Makes imaging and semiconductor manufacturing systems | 6.5 | 1.0 | 5.0% | |
14 | Porvair | Manufactures filters and laboratory equipment | 8.0 | -0.6 | 4.9% | |
15 | Auto Trader | Online marketplace for motor vehicles | 7.0 | 0.2 | 4.4% | |
16 | Advanced Medical Solutions | Manufactures surgical adhesives, sutures and dressings | 6.5 | 0.6 | 4.2% | |
17 | Volution | Manufacturer of ventilation products | 8.5 | -1.5 | 4.0% | |
18 | Focusrite | Designs recording equipment, synthesisers and sound systems | 6.0 | 1.0 | 4.0% | |
19 | Macfarlane | Distributes and manufactures protective packaging | 6.0 | 1.0 | 4.0% | |
20 | Cake Box | Cake shop franchise and sweet manufacturer | 7.0 | 0.0 | 3.9% | |
21 | Keystone Law | Operates a network of self-employed lawyers | 7.5 | -0.6 | 3.8% | |
22 | YouGov | Surveys public opinion and conducts market research online | 6.0 | 0.9 | 3.7% | |
23 | Anpario | Manufactures natural animal feed additives | 7.0 | -0.1 | 3.7% | |
24 | Judges Scientific | Manufactures scientific instruments | 7.0 | -0.2 | 3.6% | |
25 | Games Workshop | Designs, makes and distributes Warhammer. Licenses IP | 8.5 | -1.7 | 3.5% | |
26 | Goodwin | Casts and machines steel and processes minerals for niche markets | 8.5 | -1.9 | 3.2% | |
27 | 4Imprint | Customises and distributes promotional goods | 8.0 | -1.6 | 2.9% | |
28 | Renishaw | Makes tools and systems for manufacturers | 6.5 | -0.4 | 2.5% | |
29 | Tristel | Manufactures hospital disinfectant | 8.0 | -2.1 | 2.5% | |
30 | Quartix | Supplies vehicle tracking systems to small fleets | 7.5 | -1.8 | 2.5% |
Click on a share's score to see a breakdown (scores may have changed due to movements in share price). Key: qual is the share’s score out of 9 for the three quality factors (capabilities, risks, and strategy), price is the price score from -3 to +1, and ih% is the suggested ideal holding size as a percentage of the total value of a diversified portfolio.
Richard Beddard is a freelance contributor and not a direct employee of interactive investor.
Richard owns Jet2 and many shares in the Decision Engine. He weights his portfolio so it owns bigger holdings in the higher-scoring shares.
For more on the Decision Engine, please see Richard’s explainer.
Contact Richard Beddard by email: richard@beddard.net or on Twitter: @RichardBeddard
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