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The FTSE 100 index has had a lot of big winners in 2025. Barclays (+68%), International Consolidated Airlines or ‘IAG’ (+33%), and Games Workshop (+48%) are some examples.
There’s a cheap Footsie stock that has outperformed all of these names, however. And surprisingly, no one’s really talking about it in the same way as the aforementioned trio, meaning that it could have further to run.
From zero to hero
The stock I want to highlight today is Prudential (LSE: PRU). It’s a longstanding British insurance company that’s focused on the Asian and African markets today.
This stock had a dreadful time between the start of 2023 and the end of 2024 due to Covid/economic woes in China. However, this year, it has made a huge comeback, rising about 72%.
Still cheap today
Incredibly, it still looks cheap, even after that huge share price pop. With analysts forecasting earnings per share of $1.18 next year, the price-to-earnings (P/E) ratio is only about 12.
That multiple is below the UK market average. So, there appears to be value on offer here still.
One other thing to note is that the stock remains well below its highs. Back in 2018, it was trading above £16 compared to Friday’s (12 December) £10.72 close.
Three reasons to take a closer look
Is the stock worth considering for 2026 and beyond given its share price momentum and low valuation? I think so (I’ve been buying more shares myself recently).
For starters, recent results have been impressive. In late October, for example, the company said that in Q3 it saw a 13% year-on-year increase in new business profit.
Importantly, the company saw double-digit growth in both Mainland China and Hong Kong in Q3. So, these markets appear to be back on track after some Covid woes.
Second, the company is selling off its stake in ICICI Prudential Asset Management, which is about to go public. This is set to have a valuation of around $12bn so this should bring in a fair bit of cash for the company, which could mean more share buybacks or higher dividends (the yield is only 2% currently).
Third, analysts have been increasing their price targets recently (this activity tends to boost a stock). Note that the average price target is about £13 – around 20% above the current share price.
Of course, economic conditions in Asian and African markets are a risk with this stock. These are emerging markets and they can be more volatile than developed markets such as the UK and the US.
Turbulence in the global financial markets is another risk to consider. This could negatively impact assets on Prudential’s balance sheet (eg stocks and bonds).
Overall, I like the risk/reward proposition at current levels. In my view, the stock is worthy of further research.
As are a few other high-quality stocks in the Footsie that look cheap today.
