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There are plenty of household-name stocks languishing in the FTSE 250 as 2026 approaches. And while there are some I’m not convinced about — including Aston Martin and Ocado — there are others I reckon have strong turnaround potential.
Here are two of them.
Down 43%
Let’s start with WH Smith (LSE:SMWH), which has plummeted 43% year to date.
The damage came back in August when the company announced its North American division had been overstating profits. It led to the departure of the chief executive and annual results being delayed (twice) while an independent reviewer gets to the bottom of things.
The results covering the year to 31 August (FY25) are finally due tomorrow (19 December). But given the obvious risks here, why bother with WH Smith?
Well, firstly, this wasn’t fabricated income. The retailer recorded it too early from suppliers. It now expects to book an annual headline trading profit of £5m-£15m in its North American division, instead of £55m as originally guided.
So, this appears to be a timing issue (though obviously a serious one, with prior year adjustments also expected). Supplier income in its UK and Rest of World divisions has been “appropriately recognised“.
Therefore, the problem is confined to North America, not group-wide. And the company still expects group pre-tax profit to be in the range of £100m-£110m for FY25.
Meanwhile, the long-term opportunity still appears intact, in my opinion. WH Smith is now a pureplay travel retailer, with over 1,200 outlets worldwide, including in leading international airports where competition is structurally limited.
Between 2024 and 2050, passenger numbers are forecast to increase 2.5 times as international markets develop and travel booms. WH Smith intends to grow its share of the massive North American travel retail market to around 20% by 2028, up from 14% today.
Of course, it will take time to fully restore investors’ trust. But patient investors might want to consider the stock while it’s at a 12-year low.
The forward price-to-earnings (P/E) ratio is now less than 10.
Down 38%
The second FTSE 250 stock I think could bounce back in 2026 is Greggs (LSE:GRG). It has plunged 38% this year after weaker-than-expected sales growth and wider macroeconomic pressures, which are admittedly still risks in the background.
Yet with November’s inflation rate falling to the lowest level in eight months, and further interest rate cuts likely in 2026, consumer confidence might start creeping back.
2025 will also be Greggs’ peak year for capital expenditures, as it invests in new Kettering and Derby facilities. The latter, set to open in early 2026, will be a state-of-the-art frozen production and logistics site. It will feature fully automated robotic order picking and distribution, which should boost long-term operating margins.
These locations will add the manufacturing and logistics capacity to support up to 3,500 shops (up from 2,675 in September).
In the meantime, the firm is also trailing ‘Bitesize Greggs’, which are smaller store formats for high-footfall locations (like busy train stations and airport terminals) that don’t have enough room for a standard shop.
After the share price collapse, Greggs trades on a forward-looking P/E ratio of roughly 13. Add in a 4% dividend yield, and this FTSE 250 stock looks like a solid value proposition worth taking seriously.
