The FTSE 100 and FTSE 250 moved sharply downwards on Thursday (3 April). The moves mark a reaction to new US tariffs, not just those imposed on the UK, but globally.
That’s because the UK’s largest-listed companies produce and operate globally, and not just in the UK. What’s more, this downward movement in shares is nothing compared to what we’re seeing in the US where pre-market activity indicates something of a selloff.
So where might investors find safety in the UK market? Here are two ideas to consider.
Jet2
Jet2 (LSE:JET2) shares appear highly undervalued, trading at just 0.85 EV-to-EBITDA, a figure that highlights the disconnect between its valuation and operational strength. Unlike many airlines, Jet2 benefits from a robust net cash position of £2.3bn, which is projected to grow to £2.7bn by 2027.
This liquidity provides a solid foundation for strategic investments and shields the company from macroeconomic shocks, including tariff risks, which Jet2 has minimal exposure to.
The airline’s plan to replace and expand its fleet is ambitious yet manageable, with annual capital expenditure of £833m aligning with industry norms at 11.4% of revenue for 2025. This ratio is expected to decline further as revenue grows to £8.6bn by 2027.
Jet2’s fleet replacement strategy focuses on operational efficiency, with newer Airbus A321neo aircraft offering lower fuel consumption and higher capacity, which could improve margins in the long run. In the short run however, we could see further downward pressure on oil and jet fuel prices following Trump’s tariffs.
There are risks. This includes the impact of higher National Insurance contributions, Minimum Wage growth, and increased landing fees. However, Jet2’s earnings are forecasted to grow steadily, with EPS increasing from £1.83 in 2025 to £2.08 in 2027.
For me, Jet2’s combination of cash strength and growth forecasts offer some degree of safety from the volatility. It’s also very cheap. That’s why I’m looking to top up.
AstraZeneca
AstraZeneca (LSE:AZN) — the largest company on the FTSE 100 — has emerged as a potential safe haven amid the fallout from Trump’s sweeping tariffs. According to a clarifying fact sheet from the White House, drugs imported into the US appear exempt from higher-rate reciprocal tariffs. This provides relief to pharmaceutical firms like AstraZeneca and GSK.
While uncertainty remains over whether the broader 10% baseline tariff could apply, AstraZeneca’s strong financial position and global pipeline suggest resilience. The company has reassured investors it is actively assessing the implications of the announcement but expects essential medicines to remain exempt.
AstraZeneca performed well in 2024, and its ambitious pipeline of new medicines and transformative technologies positions it for sustained growth, targeting $80bn in revenue by 2030. With no immediate tariff exposure and a catalyst-rich year ahead, AstraZeneca offers stability in turbulent markets.
However, it’s worth remembering that drug discovery is an expensive business, and many pipeline candidates never make it to market. What’s more, it’s slightly more expensive than some of its peers on a near-term basis. If earnings growth doesn’t materialise, the stock could pullback. Nonetheless, it’s one I’m topping up on.
This post was originally published on Motley Fool
