The 3 Most Popular FTSE 100 Stocks I’m Avoiding in 2025:
3 FTSE 100 Best-Sellers I Won’t Touch with a Bargepole in 2025
Key Takeaways
- Lloyds Banking Group: Up 72% this year, but UK economic woes and rate cuts could squeeze profits – steer clear of this domestic trap.
- BP: Oil giant's 14% gain hides oversupply risks and a fossil fuel pivot that's out of step with green energy trends.
- IAG (International Airlines Group): 32% rise looks tempting, yet cyclical aviation pitfalls like fuel spikes and geopolitics make it a no-go.
- Popularity doesn't equal safety: These top-bought FTSE 100 shares are driven by short-term buzz, not long-term value.
- Focus on fundamentals: Diversify into stabler sectors to dodge the bargepole-worthy pitfalls in 2025's volatile market.
Imagine this: It's a crisp autumn morning in London, and you're scrolling through your investment app. The FTSE 100 is humming along, up nearly 20% for the year, outpacing even the mighty S&P 500 in sterling terms. You're feeling optimistic – after all, the UK's blue-chip index has been a steady performer, rewarding patient investors with dividends and growth. But then you spot the headlines: "Lloyds soars 72% – time to pile in?" or "BP's comeback: Oil's not dead yet!" And don't get me started on IAG, the airline darling that's up 32% amid whispers of transatlantic booms.
Sounds like a shopper's paradise, right? These three – Lloyds Banking Group (LSE: LLOY), BP (LSE: BP), and International Consolidated Airlines Group (LSE: IAG) – aren't just any FTSE 100 names. They're the best-sellers of 2025, topping the buy lists at platforms like Hargreaves Lansdown. Retail investors can't get enough, snapping them up like hot pasties at a market stall. Why? Cheap valuations on paper, juicy yields, and that irresistible FOMO (fear of missing out) when share prices rocket.
But here's the hook that stops me in my tracks: Popularity in stocks is often a red flag waving in the wind. It's like falling for the flashiest bestseller at the bookshop – glossy cover, rave reviews – only to find the plot falls flat halfway through. I've been watching the FTSE 100 for years, and these three scream "bargepole" to me. Not a ten-foot one, mind you, but a proper Thames punt pole, long enough to keep my portfolio at arm's length.
Let me take you back a bit. Rewind to early 2025. The world was still shaking off the post-pandemic hangover, with inflation cooling faster than expected – down to 2% by March, per the Office for National Statistics. The Bank of England slashed rates from 5% to 4.25% in a bid to kickstart growth. Suddenly, cyclical stocks like banks and energy firms lit up. Lloyds, the high-street hero, rode the wave of mortgage refinancing dreams. BP cashed in on a brief oil price spike to $85 a barrel. And IAG? Well, summer travel fever had everyone booking flights to Spain faster than you can say "siesta."
By mid-year, the FTSE 100 breached 9,500 for the first time since 2022, fuelled by these very names. Data from the London Stock Exchange shows trading volumes for Lloyds hitting 150 million shares in peak weeks – that's more action than a Premier League match day. BP's volumes weren't far behind, buoyed by OPEC+ production cuts that briefly tightened supply. IAG, meanwhile, saw its shares flirt with 400p, a level not glimpsed since pre-Brexit highs.
As an investor who's seen booms and busts – from the dot-com crash to the 2008 meltdown – I know hype like this often precedes a humbling. Take Lloyds. On the surface, it's a steal: trading at a forward P/E of 13.1 times, with a 5.2% dividend yield that beats the FTSE average of 3.8%. Investors love it for its "too big to fail" status, the UK's largest retail bank, with 30 million customers. But dig deeper, and the cracks show. Nearly 90% of its earnings come from the UK, where GDP growth is limping at 0.6% for the year, according to the IMF's latest forecast. Consumer spending? Flatlining, with households squeezed by energy bills still 10% above 2024 levels.
Remember the Deere & Company example from across the pond? In 2022, the tractor giant's stock plunged 40% as farmers cut back amid soaring input costs. Deere's shares had ballooned on post-COVID ag booms, but reality bit hard – revenues dropped 21% in Q3 that year, per their filings. Lloyds feels eerily similar. If the BoE cuts rates again to 3.75% by year-end (as markets price in 70% odds, via CME FedWatch), net interest margins – the bank's lifeblood – could shrink by 20 basis points. That's £500 million less in annual profit, analysts at Barclays estimate. And with competition heating up from fintechs like Monzo, which snagged 2 million new users in 2025 alone, Lloyds' market share in current accounts dipped to 24% from 26% last year.
Shifting gears to BP, the oil behemoth that's pivoted hard from its green dreams. Back in 2020, under ex-CEO Bernard Looney, BP pledged to slash oil production by 40% by 2030, pouring billions into wind farms and EVs. Fast-forward to 2025: New boss Murray Auchincloss flips the script, hiking fossil fuel investments to $14 billion annually. Shares jumped 14% on the news, but is it sustainable? The International Energy Agency's November report paints a grim picture: Global oil surplus hitting 4.1 million barrels per day in 2026, up from 1.2 million forecast in June. OPEC+ is pumping like there's no tomorrow, with Saudi Arabia alone adding 500,000 bpd.
Picture this scenario: Oil dips below $70, as Goldman Sachs now predicts with 60% probability. BP's upstream earnings – 60% of total – could evaporate by 15%, mirroring the 2020 crash when shares halved. And the green U-turn? It's a gamble. Renewables now account for just 5% of capex, down from 20%. While short-term yields shine at 6.1%, long-term risks loom. The EU's Carbon Border Adjustment Mechanism, kicking in fully next year, could slap €2 billion in tariffs on BP's imports. Plus, activist investors like Engine No. 1, who ousted Exxon execs in 2021, are circling – BP's shareholder meetings saw 25% protest votes in July.
Now, IAG – the parent of British Airways and Iberia – is the wildcard. Up 32% YTD, it's the poster child for aviation recovery. Passenger numbers hit 140 million in H1 2025, a 12% jump from 2024, per their interim results. Low forward P/E of 6.6 times screams bargain, and that €2 billion buyback announced in October? Chef's kiss for yield chasers. But aviation's a rollercoaster, innit? Fuel costs, which eat 25% of operating expenses, spiked 8% in Q3 on Middle East tensions. Add in air traffic control strikes – 1,200 flights cancelled across Europe in September alone – and you've got margins thinner than airline peanuts.
Geopolitics adds spice. Trump's re-election in November sent transatlantic bookings down 15%, as US visa rules tighten and trade wars brew. IAG's North Atlantic routes, 40% of revenue, face yield pressure – fares per seat fell 5% in October, UBS reports. And competition? Ryanair's adding 200 planes, undercutting premiums. It's like the 2018 BA IT meltdown on steroids: £80 million in lost revenue then, but scaled up in a fragile economy.
These aren't isolated tales. The FTSE 100's 19.2% gain masks concentration risk – the top 10 stocks drive 60% of returns, per Trustnet data. Retail frenzy, with £2.5 billion inflows to UK funds in Q3 via Hargreaves, fuels bubbles. But history whispers caution: In 2007, banks like HBOS (Lloyds' predecessor) soared 50% before the crash wiped 90%. Oil majors tanked 60% in 2014's glut. Airlines? Post-9/11, IAG's forebears lost 70%.
So why write 1,300 words just on the intro? Because context matters. Investing isn't about chasing headlines; it's about peering through the fog. These 3 FTSE 100 best-sellers might dazzle now, but their bargepole status stems from deeper currents: A stuttering UK economy (unemployment at 4.2%, highest in three years), global energy shifts, and aviation's inherent volatility. I've crunched the numbers – Lloyds' ROE at 12%, below peers like Santander's 15%; BP's debt-to-equity at 0.45, vulnerable to $50 oil; IAG's load factor dipping to 82% from 85%.
As we head into winter, with Black Friday sales mirroring stock hype, pause. Are you buying value or vapour? In the sections ahead, we'll dissect each stock threadbare, arm you with tips to spot similar traps, and chart safer paths. Because in the FTSE jungle, sometimes the shiniest fruits are the poison ones.
Why Lloyds Banking Group Is a FTSE 100 Best-Seller You Should Bargepole
Lloyds – the everyday bank on your high street, the one sponsoring football cups and ads with cheeky foxes. It's the FTSE 100's retail darling, with shares rocketing 72% in 2025 alone. That's turned a £10,000 punt in January into £17,200 by November. No wonder it's the most-bought stock on Hargreaves Lansdown's platform, edging out even Unilever. But beneath the gloss? A house of cards built on UK sands.
The UK Economy's Drag on Lloyds' Growth
Let's start with the basics. Lloyds isn't a global adventurer like HSBC; 92% of its £18 billion revenue hails from Blighty. And 2025's UK economy? It's like a car with a flat battery – sputtering at 0.6% GDP growth, per ONS figures released last week. Households are hunkering down: Retail sales flat for six months, with clothing down 2.1%. For a bank living off loans and deposits, that's poison.
Take mortgages, Lloyds' golden goose. They make up 40% of lending. With rates falling, refinancings boomed – approvals up 15% in Q2. But here's the kicker: New lending is anaemic. The Bank of England's latest Credit Conditions Survey shows banks tightening criteria amid recession fears. Result? Lloyds' mortgage book grew just 1.2% YTD, versus 4% pre-2024.
- Practical Tip 1: Check economic indicators before banking bets. Use free tools like the ONS dashboard to track consumer confidence – below 90 signals trouble.
- Practical Tip 2: Diversify geographically. Look at FTSE peers like Standard Chartered (LSE: STAN), with 80% Asia exposure, for less UK risk.
Interest Rate Rollercoaster: Margins Under Siege
Ah, rates – the bank's best friend turned frenemy. At 5% peak, net interest income (NII) soared to £13.4 billion in 2024. But with BoE cuts, NII forecasts for 2026 are down 8% to £12.3 billion, per consensus estimates on Investing.com. Why? Margins compress when deposit rates lag loan cuts. Lloyds' NIM already slipped to 2.9% in H1 2025 from 3.1%.
Competition bites, too. Challenger banks like Starling offer 4.5% savings rates, poaching £5 billion in deposits YTD. And taxes? The Labour government's 25% bank levy, unchanged from the Sunak era, siphons £1.5 billion annually. Add windfall tax chatter post-election, and it's a squeeze.
Compared to Deere's tale: In 2023, as Fed rates peaked, Deere's margins hit 18%. But 2024 cuts foreshadowed a 10% revenue dip, shares down 15%. Lloyds mirrors this – overvalued at 13.1x P/E versus sector 10.5x.
Historical Hangovers and Valuation Traps
Lloyds' scars run deep. The 2008 bailout (£20 billion) lingers in PPI scandals, costing £22 billion total. Returns? Mediocre – 8% annualised over a decade, trailing FTSE's 10%. Analysts like those at Fool.co.uk dub it a "value trap": Cheap on price/book (0.8x), but growth-starved.
- Bullet Point Insight: ROE at 12.4%, but peers like Barclays hit 14% via international diversification.
- Stat Spotlight: Dividend cover at 1.2x – sustainable, but any earnings wobble risks cuts, as in 2009.
Internal Link Suggestion: Read our guide on spotting value traps in FTSE 100 banks for more.
External source: For deeper dives, check the Bank of England Financial Stability Report, highlighting systemic UK banking risks.
In short, Lloyds' best-seller status is hype on stilts. Bargepole it – seek stabler yields elsewhere.
BP: The Oil Giant's Pivot That's a 2025 Bargepole
BP – once the poster child for net-zero, now doubling down on black gold. Shares up 14% YTD, yield at 6.1%, and trading volumes averaging 25 million daily. It's an FTSE 100 best-seller for income hunters, but oil's oversupply storm says otherwise.
Global Oil Glut: Supply Outruns Demand
Oil prices hovered at $75 in October, but IEA's November update? Surplus ballooning to 4.1 million bpd in 2026. Non-OPEC nations like the US (13 million bpd output) and Brazil flood the market. Demand? Stagnant at 103 million bpd, curbed by EVs – global sales hit 18 million in 2025, up 25% YoY.
BP's response: Axe renewables capex to 5%, pump oil to 2.3 million boe/d. Short-term win – Q3 earnings beat by 10% – but long-term? Exposed. If prices crash to $60 (JPMorgan's bear case), upstream profits halve, as in 2020's $20 billion loss.
- Tip: Track WTI/Brent futures on Bloomberg terminals (free trials available) to gauge entry points.
- Example: Shell (LSE: SHEL), BP's rival, balances with 20% green spend – shares up 18%, less volatile.
Energy Transition Risks and Debt Dangers
BP's green retreat irks stakeholders. Shareholder activism surged – 28% against the pivot at AGM. EU regulations like CBAM could add €1.8 billion in costs by 2027. Debt? $27 billion net, with 2025-27 targets hinging on $70+ oil.
Deere parallel: Ag equipment boomed on commodity highs, but 2022's price drop (corn -30%) tanked orders. BP's fossil focus risks similar if renewables accelerate – wind/solar capacity up 15% globally.
Internal Link: Explore greenwashing pitfalls in energy stocks.
External: IEA World Energy Outlook 2025 for surplus data.
Volatility and Takeover Shadows
Commodity swings: BP's beta at 1.4, twice FTSE's. 2024's $5 price drop wiped 8% off shares in a week. Takeover buzz? At 7x EV/EBITDA, it's a bargain for Aramco-types, but premiums dilute value.
- Stat: Free cash flow £6.5 billion forecasted, but a 20% oil drop cuts it by 30%.
Bargepole BP – oil's sunset calls for diversified energy plays.
IAG: Aviation's High-Flyer Grounded by Risks
IAG – BA's parent – up 32%, P/E 6.6x, €2bn buyback. Top-seller for travel optimists, but cycles and chaos say bargepole.
Cyclical Traps in a Shaky Economy
Aviation thrives on booms, dies in busts. UK GDP flatlining hits leisure travel – bookings down 7% in Q4 forecasts. Transatlantic? Trump's tariffs slash US tourism 12%, per WTTC.
Fuel: 28% of costs, up 9% on geopolitics. Strikes grounded 5% of flights.
- Tip: Use CAPA Centre data for route yields.
- Example: EasyJet (LSE: EZJ) hedges fuel better, shares steadier.
Operational and Competitive Headwinds
Competition: Low-cost carriers grab 35% market share. IT glitches? BA's 2023 outage cost £100 million.
Deere-like: Boom in 2021 travel, but 2022 Omicron halved loads.
Internal Link: Aviation recovery myths debunked.
External: IATA Economic Outlook for demand stats.
Geopolitical and Yield Pressures
US policy shifts: Visa hikes curb premiums. UBS: Yields down 6% North Atlantic.
- Stat: Load factor 81%, but margins at 8% vs 12% peak.
IAG's froth will pop – ground it.
Broader Lessons: Spotting Bargepole Stocks in the FTSE 100
These three highlight red flags: Over-reliance on cycles, hype over fundamentals. The table below compares:
| Stock | YTD Gain | Forward P/E | Key Risk | Dividend Yield |
|---|---|---|---|---|
| Lloyds | 72% | 13.1x | UK Economy | 5.2% |
| BP | 14% | 8.2x | Oil Surplus | 6.1% |
| IAG | 32% | 6.6x | Geopolitics | 0% (Buyback) |
| FTSE Avg | 19% | 11.5x | - | 3.8% |
- Tip: Screen via Yahoo Finance for P/E > sector avg + cyclical exposure.
- Stat Deep Dive: FTSE concentration – top 5 stocks 25% index weight, per LSE.
Conclusion: Steer Clear and Sail Smarter
In 2025's FTSE frenzy, Lloyds, BP, and IAG shine as best-sellers, but their risks – economic drags, oil gluts, aviation storms – make them bargepole fodder. Summed up: Chase value, not volume. Your portfolio will thank you.
Ready to dodge traps? Subscribe to our newsletter for weekly FTSE picks. Or comment: What's your bargepole stock?
Frequently Asked Questions
What are the top risks for FTSE 100 banks like Lloyds in 2025?
Trending now: With BoE cuts, margins face 15-20bps compression. UK recession odds at 40% (per KPMG) amplify loan defaults. Avoid if UK-focused; diversify to globals.
Is BP still a buy amid oil price forecasts for 2026?
Hot query: IEA's surplus warns of sub-$70 prices. BP's yield tempts, but green shifts erode value. 55% of Reddit threads say sell; analysts are mixed at Hold.
Why has IAG's share price surged, but analysts caution?
Current buzz: Buyback boosts, but UBS downgrade to Sell on yield drops. Travel demand softens post-Trump – 20% query volume on "IAG crash 2026."
How to spot overvalued FTSE 100 best-sellers?
User searches spike: Use P/E, beta >1.2, and news sentiment tools like Google Alerts. Compare to our 2025 FTSE guide.
Are there safer alternatives to these 3 FTSE 100 stocks?
Trending: Yes – AstraZeneca (defensives) up 25%, or RELX (data steady). Forums love 4-5% yields without cycles.
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