UK company results outlook: FTSE 100 vs FTSE 250

Earnings growth in the “comparatively cheap” FTSE 250 index is poised to lag the FTSE 100 after a leading bank published its Best of British forecasts for the half-year results season.

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Deutsche Bank expects stocks in the financials, basic materials and staples sectors to drive a 9% year-on-year increase in mid-cap earnings, a performance that represents an acceleration from the slight contraction seen in the second half of last year.

Consumer discretionary is likely to have been the biggest drag on the growth rate, with Wizz Air Holdings (LSE:WIZZ) among those providing a negative contribution.

The bank adds that half-year estimates among UK small and mid-cap equities have declined by 8% since the start of the Iran war and that earnings will still be down by 13% on a sequential basis versus the second half of 2025.

That’s in contrast to the FTSE 100, where high exposure to energy through the likes of BP (LSE:BP.) and Shell (LSE:SHEL) have boosted estimates by 8% since the war began at the end of February.

The City consensus currently expects earnings in the FTSE 100 will be up 10% year-on-year, which is an acceleration from the 4% growth rate recorded in the second half of 2025 and a sequential improvement of 13% on the previous six months.

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The energy sector is expected to do the heavy lifting and contribute seven percentage points to the year-on-year growth rate of 10%. Excluding energy, the consensus only expects half-year earnings to increase by 3% year-on-year and by 4% versus the second half of 2025.

Deutsche Bank is more optimistic and has forecast earnings growth ex-Energy of 5%.

It said: “Despite heightened geopolitical uncertainty in H1, the global macro environment has been more resilient than feared, with UK economic growth surprising to the upside and global PMIs (purchasing managers’ indices) remaining in expansionary territory.

Shell and BP are due to announce bumper profits on 30 July and 4 August respectively, while the mining sector results season begins with Rio Tinto  Ordinary Shares (LSE:RIO) on the evening of 28 July before Anglo American (LSE:AAL) on 30 July and Glencore (LSE:GLEN) on 5 August.

Barclays (LSE:BARC) is the first major UK bank to post figures on 28 July, followed by Lloyds Banking Group (LSE:LLOY) and NatWest Group (LSE:NWG) on 30 July and 31 July respectively and Asia-focused bank HSBC Holdings (LSE:HSBA) on 4 August.

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Other FTSE 100 stocks to look out for include AstraZeneca (LSE:AZN) on 27 July, BAE Systems (LSE:BA.) on 30 July, International Consolidated Airlines Group SA (LSE:IAG) on 31 July, Legal & General Group (LSE:LGEN) on 5 August and Direct Line owner Aviva (LSE:AV.) on 14 August.

Prior to these results, City consensus pointed to FTSE 100 earnings growth of 14% across the 2026 calendar year.

This takes into account the stronger energy sector earnings, as well as resilient growth elsewhere as energy-intensive corporates have appeared to be well hedged against this year’s higher oil and gas prices and some have even hiked prices.

The projected 14% growth rate compares with a forecast of 10% for the FTSE 250 index.

The FTSE 100 has risen by 20% in the past year, but Deutsche Bank notes that UK small and mid-cap stocks have underperformed by 10%.

It adds that UK equities, particularly mid-caps, remain comparatively cheap to other benchmarks such as the S&P 500 index and Europe’s Dax and Cac40.

UK equities trade at about 12.3 times forward earnings, which UBS noted this week compared with a median of 12.8 times since 1990. It forecasts earnings growth of 11% this year and 10% in 2027.

About 75-80% of FTSE 100 revenue is generated outside the UK, meaning the broader equity market should remain relatively insulated from recent domestic political change.

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UBS said: “More pro-growth policies under Andy Burnham could improve the economic outlook and support sentiment toward domestically focused companies, including UK banks, but this is likely to be a relatively minor part of the overall market story.

“Global growth and sector trends should remain more important for the FTSE 100, with positive global growth and improved energy-price developments providing a supportive backdrop.”

The bank has a Neutral stance on UK equities, with its preference for a combination of cyclical earnings improvers and structural growth opportunities in areas such as industrials, consumer discretionary and health care.