By historical standards, it’s been a pretty good year for the FTSE 100. Since the start of 2025, the index has gained approximately a fifth. And unless something dramatic happens today (23 December) or tomorrow, we know who will be the Footsie’s Christmas number one.

Any guesses?

A gold star

Yes, it’s Fresnillo, the Mexican-based gold and silver producer. Its share price has more than trebled this year. On the back of soaring metals prices – gold reached a record high in October – it’s been the FTSE 100’s star performer.

But I can’t see this being repeated in 2026.

Although some gold price forecasts are expecting a move towards $5,000 (currently it’s around $4,300), it’s difficult to make accurate predictions. There are just too many moving variables. And because of this year’s rally, I suspect the group’s share price already reflects some of the more optimistic forecasts. Any sign of weakness in either gold or silver and Fresnillo’s shares could fall dramatically.

I therefore think we are going to have to look elsewhere for the FTSE 100’s 2026 top performer. But who might this be?

Take your pick

To be honest, it’s impossible to say. History suggests that the biggest share price swings (up and down) are often caused by volatile commodity prices.

For example, a spike in energy prices would make BP and Shell strong candidates for the 2026 Christmas top spot. Alternatively, a surge in demand for non-precious metals could help the Footsie’s miners.

However, there’s one stock that has nothing to do with these sectors, that I think will have a good 2026. Don’t get me wrong, I’m not predicting a performance like Fresnillo’s in 2025. But I still think Diageo (LSE:DGE), the drinks giant, is a stock worth considering as we head towards the new year.

Cheers!

The consensus of analysts is that its share price is approximately 20% undervalued.

To get close to this, I believe the group’s going to have to convince investors that it’s able to reverse a trend of falling sales and earnings, in a market that appears to be undergoing structural change. Gen Zers are drinking less than their parents. They also appear to be trading up and buying more expensive brands, something the group calls “premiumisation”.

Fortunately, Diageo’s well positioned to accommodate changing tastes. It has over 200 brands in its portfolio – including some iconic ones like Guinness and Smirnoff — covering all price points, including the more expensive ones. It also retains a truly global reach and – based on revenue — remains the world’s number one for spirits.

However, the group’s most recent trading update revealed flat sales and its June 2025 annual report disclosed an increase in borrowings.

Happy New Year?

The task of reversing the group’s fortunes will shortly lie with the group’s new boss, Sir Dave Lewis, who officially joins on 1 January 2026. He has an excellent reputation, which gives me confidence that he can deliver a successful turnaround.

The next scheduled update for investors is in February 2026. I wonder if this could be the catalyst for a 2026 recovery? One advantage of the falling share price, is that buyers today could enjoy a 4%+ dividend yield (no guarantees, of course). This should provide some comfort if news of the recovery I anticipate is delayed.