Image source: Getty Images
What are the best FTSE 100 stocks to buy? It’s a question more and more of us are asking. That the index has bagged average total returns of 14% a year for the last half-decade – and plenty of stocks way above that too – might have something to do with its popularity.
One way to find the hottest Footsie properties is to look at institutional analysts’ ratings. The number of Buys and Sells forecasts for financials or 12-month price targets can give an idea of where to start looking. It might even clue me in to the best bargains out there. That’s why I recruited my old friend ChatGPT to give me a roundup.
To be clear, I don’t use artificial intelligence models for financial advice. They aren’t suited for the task, not to mention those pesky hallucinations that always tend to crop up. But for simple data retrieval and synthesis that I’ll independently verify, I think I can rely on the ever-obedient chatbot.
What did ChatGPT say?
Question: “What FTSE 100 stocks get the best ratings from analysts at the moment?”
The first name I noticed on the list was no surprise – high-flyer Rolls-Royce. I did a little independent checking to make sure and indeed the ratings were good. There were 16 Buys or Strong Buys out of 20 analysts covering the stock, and not a single Sell. The consensus 1,730p price target implies a 18.4% rise over the next 12 months.
Two other stocks that had a smattering of Buys with zero or just one Sell were Marks and Spencer and AstraZeneca. But there was one stock that really caught my eye…
Oops-a-daisy
To begin with, gambling group Entain (LSE: ENT) is no longer on the FTSE 100. It was booted off the index in late September after its market value fell close to the £3bn mark – at least a billion from the smallest companies on the index. Oops-a-daisy ChatGPT!
Ignoring the AI-generated mistake, I think the owner of Ladbrokes, Coral and PartyPoker is worth examining. The analysts are extremely bullish – not a single Sell, and a 12-month price target of 994p against a current share price of 416p looks enticing. That’s not a single target, by the way. It’s the consensus.
Is doubling the share price in the next year likely? One reason to think not is increasing taxes and regulation. Governments around the world are tightening the screw on gambling.
The UK increased gambling taxes this year while Germany has tightened the rules too. Most notably, the president of Brazil made moves to ban all online sports betting and gaming recently. There is an ethical dimension to investing in stocks of this nature too.
Personally, all that’s enough for me to want to stay well away, whatever the analysts are saying.
Should you invest £5,000 in Entain Plc right now?
When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.
And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Entain Plc made the list?
John Fieldsend owns shares in Rolls-Royce and AstraZeneca.
This story originally appeared on Motley Fool
