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The FTSE 100 may not look obviously cheap at first glance, but dig beneath the surface — and to other areas of the UK market — and there are still pockets of real value.
A handful of stocks appear mis-priced relative to their earnings recovery and medium-term growth outlooks. And these are simply the stocks I know best.
Let’s explore.
Marks and Spencer
Marks and Spencer (LSE:MKS) has started 2026 positively after strong Christmas trading, yet the share price remains well below its 2025 highs. The reason is a cyberattack in April, which severely disrupted operations and forced analysts to downgrade earnings expectations for FY2026.
At one stage, consensus EPS forecasts stood near 31p. Today, they sit closer to 23.2p. But with the financial year drawing to a close, attention is shifting to recovery. Forecast earnings per share for FY2027 are 34.1p, putting the shares on just 10 times forward earnings.
To me that looks very cheap relative to its peers. It’s trading, adjusted for net debt, around 25% cheaper than its grocery peers. While net debt of £2.5bn may appear large in isolation, it is modest relative to the group’s market capitalisation and cash-generation potential.
Risks remain, of course. It’s a premium brand — at least perception says so — and if consumer spending weakens again, Marks could lose out to cheaper peers.
However, no investment is risk-free. Brokers are bullish too, with the average share price target 25% above the current position.
TBC Bank
TBC Bank (LSE:TBCG) is another share that stands out. This FTSE 250 stock trades at just 4.9 times forward earnings. But analysts expect revenue growth of around 17% and earnings growth of 11% across the next two years, placing it among the fastest-growing stocks in the FTSE All-Share.
The bank experienced a pullback in 2025 as regulatory changes engendered a operational shift, but this appears transitional rather than structural.
Operating across two of Eurasia’s faster-growing economies, TBC benefits from strong net interest margins and expanding digital reach. All four analysts covering the stock rate it’s a Strong Buy, and it also offers a dividend yield of roughly 6%.
Risks? Well, geopolitics is worth considering given ongoing unrest in Iran, which could have knock-on effects across the broader Caucasus and Caspian region.
However, I’m still very bullish on this company.
Melrose Industries
Finally, Melrose Industries (LSE:MRO) offers a compelling growth-at-a-reasonable-price opportunity. The group operates within aerospace and defence, with around 70% of sales coming from sole-source positions. That gives it huge pricing power.
The shares trade on about 16 times forward earnings, but earnings are forecast to grow by more than 20% per year through to 2029. That implies a price-to-earnings-to-growth (PEG) ratio comfortably below one.
Execution risk remains, particularly around supply chains. However, compared with peers like Rolls-Royce, Melrose looks significantly undervalued on a growth-adjusted basis.
The bottom line
Individually, each stock carries risk. However, coupled with other favourites of mine Jet2 and Arbuthnot, I believe these five stocks could deliver double-digit growth this year. That’s why I believe they’re all worth considering.
