I think this FTSE 100 stock can deliver a whopping 40% 12 month return

Earning high fees from FTSE 100 it usually requires a combination of good value and stellar growth. In my opinion, JD Sports Fashion (LSE:JD) offers both of these features in abundance. Here's why I think it could deliver stellar returns in 2025. But will I buy?

Special growth transaction prices

I almost bought the shares in early September when they were 15.5% cheaper than today. At that time, I realized that the market had underestimated the company. I thought it could deliver 35% growth in its market in 18 months.

Although there is a lower rate opportunity right now than at the beginning of the month, the investment is still well positioned for high long-term returns, I feel. It still has a price-to-earnings (P/E) ratio of just 14.5. This is significantly lower than its 10-year debt of 23.

However, growth is slow for the company. This is the main reason why the market is currently valuing it cheaply.

Although I can expect good growth going forward due to its strong international expansion strategy (especially in North America), I cannot expect the stellar 744% price growth the shares have delivered in the last 10 years in the next decade.

Analysts are powerful

I am more bullish on this, but 14 analysts have a 12-month target price of 10.3% growth.

In my opinion, the investment may yield higher returns than this because it may be undervalued. If its P/E ratio grows by 5% over the next 12 months and it reaches consensus earnings per share of £0.14 in January 2026, the shares could be worth £2.14 by late 2025. That is if the market prices in the future are the income in the valuation of the company in advance.

But I'm not the majority an optimist out there. The highest 12-month price target for JD Sports shares among the 14 banks I read is now £2.50.

Focusing on the long term

While a 40% return on the current price of £1.52 sounds attractive, it's not enough for the business to earn a place in my portfolio. Rather, I need to know that this company has a great chance of continuing to grow in the long term.

Analysts expect a three-year average annual earnings per share growth rate of 16%. Management was able to attract these ratings through a lean operating strategy where non-core businesses were sold to focus on their best-performing assets.

However, since the company is heavily invested in Western markets, it is highly vulnerable to economic downturns in this region, which I believe will happen soon. Due to the high inflation and huge Federal debt that is piling up in the US, I am making sure that I don't have many Western oriented companies right now.

Worth a small share?

So should I buy JD Sports? Achieving good portfolio returns is all about diversifying well. I only need to own shares in 10 or more star companies. However, it is important to make sure that these vary across regions and industries around the world. That helps protect me from different risks in different markets.

I'm still thinking about buying these shares but I haven't made up my mind yet. I don't want to make the mistake of waiting too long – measuring less is less likely to take longer!