These FTSE 100 corporations are tipped to ship gorgeous earnings progress over the following two years. However I wouldn’t contact these progress shares with a protracted stick.

Right here’s why I believe they may show to be costly errors if I purchased them.

Barclays

Retail banks are referred to as safe-and-steady investments slightly than blistering progress shares. However within the case of Barclays (LSE:BARC), the other seems to be true.

Properly, no less than that’s the state of affairs based mostly on present dealer forecasts. The Metropolis thinks earnings on the FTSE 100 financial institution will soar 17% in 2024, and by an extra 23% subsequent yr.

Barclays could properly obtain these targets, which in flip may drive its share price greater. A price-to-earnings (P/E) ratio of seven.3 instances supplies loads of wiggle room for a cost northwards if buying and selling information impresses.

The financial institution’s giant publicity to the US, for example, may assist it to develop earnings strongly. However the dangers to Metropolis projections are additionally important for quite a lot of different causes.

Internet curiosity margins (NIMs) — which dropped 5 foundation factors within the first half, to 4.2% — look set to maintain falling as central banks lower rates of interest. Margins will even be underneath strain as challenger banks throughout its markets proceed their aggressive enlargement.

Mortgage progress in Barclays’ key British market may additionally stay subdued because the home financial system struggles to progress. Loans and deposits dropped under £200m between January and June, persevering with a gradual fall in latest quarters.

Given Barclays’ heavy restructuring prices too, I believe it may battle to satisfy present progress estimates.

Entain

Playing shares like Entain (LSE:ENT) have important funding potential as the recognition of on-line betting grows. This specific Footsie agency may ship sturdy earnings progress too, due to profitable manufacturers like Ladbrokes, Coral and BetMGM.

Internet gaming income (NGR) rose 8% at fixed currencies within the first half. Nevertheless, rising hostility from each regulators and politicians threatens future progress. Certainly, as a possible investor, this represents a big ‘red flag’ to me.

Within the UK, the Playing Fee has launched varied measures to cut back the issue of habit. These embody the rollout of affordability checks, betting limits and bans on fixed-odds betting terminals (FOBTs).

And this week, authorities sources instructed The Guardian newspaper that playing corporations may very well be hit with an additional £3bn in tax on this month’s finances. Hostility in Britain is very problematic for Entain as that’s the place it sources most earnings.

Metropolis analysts anticipate Entain to swing from losses of 150.7p per share in 2023 to earnings of 18.5p this yr. A 130% bottom-line leap to 42.6p is predicted for 2025 too.

But these projections additionally depart the Footsie agency wanting mightily costly. It trades on a ahead P/E ratio of 38.1 instances, which I contemplate far too toppy given the corporate’s big danger profile.

Like Barclays, I’ll depart Entain on the shelf and seek for different progress shares to purchase.