Image source: Getty Images
It’s been a bumpy three years for the Glencore (LSE: GLEN) share price, which has plunged 26% over that period. Investors in Diageo (LSE: DGE) have had an even worse time, their shares falling 55%.
Glencore shares are finally showing recovery potential, rising 12.7% over the last year, with much of the excitement coming since April. By contrast, Diageo slumped 36% across 2025.
I added both stocks to my Self-Invested Personal Pension (SIPP) in 2023, after their troubles had begun rather than beforehand. I like targeting FTSE 100 stocks that are having a hard time, in the hope of benefitting when they recover. In both cases, I jumped in too soon. Troubled companies rarely turn on a sixpence. It takes time to win back investor trust.
Investment risks and rewards
That’s worth bearing in mind when examining how Glencore and Diageo might fare in the year ahead.
I’m encouraged by Glencore’s recovery, although a little surprised. Key market China continues to struggle. So does the US. At the same time, new sources of demand are emerging. The energy transition and the rapid expansion of AI data centres require vast quantities of copper. Renewed infrastructure and defence spending could further boost demand for metals and minerals.
If interest rates continue to fall in 2026, the global economy may also pick up. Still, there are plenty of potential threats.
China is no longer the growth engine it once was. Glencore’s coal exposure brings political, regulatory and reputational risks. Resource nationalism, tax disputes, environmental liabilities and corruption investigations have all hurt the group in the past. Net debt stood at $14.5bn in June.
This is a cyclical sector, though, and we could be approaching an upturn. I think Glencore shares are worth considering with a long-term view, but I’m also braced for plenty more short-term volatility in 2026.
FTSE 100 recovery play
Diageo has struggled as cash-strapped drinkers spend less on its premium brands, while tariffs hit US sales. Diageo still sells more than $20bn of booze a year, but profit margins have been squeezed. New boss Dave Lewis took charge on 1 January, and I’m banking on him to turn this crate around. I suspect the sell-off has gone too far, making the shares look like a potential bargain with a price-to-earnings ratio of 13.9, although the risks are clear.
Lewis needs to rebuild battered margins and revive sales in an increasingly health-conscious world. Consumer stocks are cyclical too, and a decent economic recovery could help restore the party spirit.
I like both shares and have considered topping up my stakes in January. Of the two, Diageo is my favourite and I’m tempted to average down for what will be the fifth (and final) time. What do the experts think?
They aren’t hugely excited about Glencore, with a consensus one-year median share price target of 427p. That’s just 4.5% above today’s level. It’s a different story at Diageo, where consensus points to 2,102p, implying price rise potential of more than 30%.
Forecasts can’t be relied on, but that broadly reflects my gut feeling. I’m backing Diageo shares to come good and beat Glencore in 2026. Only time will tell if I’m right.
