Legal & General shares have the potential to help investors achieve their investment goals in 2024.

The FTSE 100 stalwart has shaken off the worst of the macroeconomic concerns, and the Legal & General share price is around 25% higher than the worst levels of 2023.

With the shares now trading in the vicinity of 52-week highs, investors will question whether it has the momentum to break through 260p – 270p and attack 300p in 2024.

There is a weight of supporting factors that suggest it will.

Legal & General Valuation

Legal & General trades at 6.7x historical earnings. No matter what happens to earnings in the next year, this is cheap and underscores the opportunities in the shares. At a 6.7x multiple, Legal & General shares have a long way to go before they trade back in line with historical averages.

Apart from 2020 and 2022, Legal & General’s historical PE Ratio has averaged above 10 on an annual basis every year since the financial crisis.

Although one may want to hold off jumping straight into Legal & General shares at the current price or set out a dollar-cost averaging strategy, the capital appreciation element of Legal & General shares in 2024 is compelling.

Legal & General Dividend Yield

Despite a rip-roaring rally through Q4 2023, Legal & General shares still yield 7.7%. The dividend is well covered at 1.9x, and the company is committed to a progressive dividend policy. One would expect the dividend to increase in 2024.

Improving macroeconomic environment

It is not that the economy is entirely out of the woods that supports Legal & General’s investment case, but more that there is light at the end of the tunnel. Investors can see a clear path to a more favourable macro environment.

Inflation rates are falling globally, and interest rates will not be too far behind. Lower interest rates will boost financial conditions and support Legal & General’s top and bottom lines.

The doomed mini-budget in 2022 that rocked Legal & General’s fixed-income activities is now a distant memory, and the shares deserve a rerate.

Helium One Global shares were down a further 16% on Wednesday as investors continued to dump the stock. The Helium One share price has lost 74% of its value so far in December alone. The stock is down 89% year-to-date.

The company sent investors running for the hills after signalling in early December that it required additional funds to make any further progress in its drill campaign.

The funding surprise came after a year of difficulties securing a rig, poor drilling results and little progress.

“Having completed the costing exercise, the Company has identified a need for additional funds before Itumbula can be drilled,” Helium One said in a statement.

“The Company is advancing discussions with potential investors while also assessing other financing options and is confident of securing additional funding in the near future,” commented Lorna Blaisse, Chief Executive Officer of Helium One.

The CEO said this on 5th December, and investors have not heard anything since.

It is an awfully difficult market to raise funds in. Investors, clearly predicting unfavourable terms of any financing package, have decided to jump ship.

This will make life even more difficult for Helium One, which now has a market cap of just £8.6m.

Housebuilding shares were higher on Wednesday after UK inflation fell to 3.9% in November. The news was welcomed by investors in interest rate sensitive sectors, including housebuilders and retailers.

“Inflation data brings good tidings. In the aftermath of this year’s economic downturn marked by sluggishness and lacklustre performance, the latest inflation figures bring a glimmer of hope to UK businesses, setting the stage for a more optimistic and merry start to 2024,” said Douglas Grant, Group CEO of Manx Financial Group.

The data suggests the Bank of England will cut rates early next year. The ailing UK property market is in desperate need of a boost after years of rising mortgage rates.

Persimmon shares rose 1.2%, Taylor Wimpey added 0.5%, and Barratt Developments ticked 0.5% higher.

The housebuilding sector had started the day considerably higher before the rally faded as the session progressed.

Companies supplying the construction trade also received a boost; Howden Joinery and Marshalls rose just under 1%.

Falling inflation will also help bolster household spending power, although analysts warned there is no quick fix for the pressures on households in the coming months.

“While this is a step in the right direction, officials are forecasting that we’ll continue to see similar levels of inflation in 2024. This means it’s likely we won’t reach the Government’s 2% target until 2025 – a year later than originally expected – so households who have had consistent strain on their pockets in recent months will see this continue,” said Gina Silvester, Chief Operating Officer at wealth app Chip.

It was evident the City was winding down for Christmas on Tuesday as the FTSE 100 gently undulated around the unchanged level on lower volumes.

Yesterday, London’s leading index played catch up with US equities as oil prices helped lift BP and Shell after BP said they were rerouting their oil vessels away from the Red Sea after a string of attacks by Yemeni militants. 

This support was absent from UK stocks today as BP and Shell fell 0.8% and 0.4%, respectively.

Reports that a coalition of Navies led by the US was heading to the Red Sea spurred traders to close long positions in oil futures. Brent and WTI retreated on Tuesday. 

Global equities are likely to be supported by interest hopes through the festive period. Although the FTSE 100 is lagging behind US peers, London’s leading index is set to support statistics pointing to a festive rally.

The conversations around when the Bank of England and Federal Reserve will cut rates will likely continue into the new year. However, with traders away from their desks and newsflow slowing, we’ve likely seen the biggest equity market moves for 2023.

“It feels like the party which started last Wednesday when the Federal Reserve signalled potential rate cuts in 2024 has fizzled out – as the central bank has looked to put a lid on market hopes for an easing in monetary policy,” said AJ Bell investment director Russ Mould.

Ocado was one FTSE 100 company that was definitely carrying on the party on Tuesday, with gains of 4%. The premium retailer is considered as a tech stock by many and trades more like Tesla than Sainsbury’s.

Ocado is the FTSE 100’s best performer in December so far, gaining a bumper 25%.

Superdry’s popularity as a brand peaked in the early 2010s, and its appeal has steadily declined since. So has its share price.

Indeed, the pace of the declines in Superdry shares picked up this morning after it announced soggy sales due to adverse weather during the important Autumn trading period.

The group said retail sales were down 13.1%, and its wholesale business cratered 41% as the company exited the US market.

In the face of falling sales, Superdry is scrambling to cut costs and selling assets to raise cash. Selling IP for the South Asian region netted £28.3m as the company agreed a £25m lending facility with Hilco Capital Limited.

Superdry shares were down 15% at the time of writing on Tuesday,

“Superbad news from Superdry this morning. The recent turn for the worse in the weather is not enough to rescue trading for the first half of their financial year,” said Steve Clayton, head of equity funds, Hargreaves Lansdown.

“Bad weather in recent weeks has moderated the drop in sales rates, but they remain in negative territory. The group are trying to raise cash and cut costs. Progress here has seen an initial £35m of cost savings targeted and the group has sold Asian assets for £28m. A credit facility with Hilco Capital brings access to another £25m. Overall, results are coming in significantly below management’s expectations.”