UK Stocks Estimated To Be 11.1% To 26.1% Below Intrinsic Value

The United Kingdom's stock market has recently faced challenges, with the FTSE 100 and FTSE 250 indices experiencing declines amid weak trade data from China, highlighting ongoing global economic uncertainties. In this environment, identifying undervalued stocks—those trading below their intrinsic value—can offer potential opportunities for investors seeking to navigate these turbulent times.

Top 10 Undervalued Stocks Based On Cash Flows In The United Kingdom

Name	Current Price	Fair Value (Est)	Discount (Est)
Warpaint London (AIM:W7L)	£2.95	£5.19	43.1%
Stelrad Group (LSE:SRAD)	£1.71	£2.66	35.6%
Orchard Funding Group (AIM:ORCH)	£0.55	£1.02	45.9%
On the Beach Group (LSE:OTB)	£2.705	£4.18	35.3%
Morgan Advanced Materials (LSE:MGAM)	£2.06	£3.83	46.2%
Mitie Group (LSE:MTO)	£1.404	£2.64	46.7%
Man Group (LSE:EMG)	£1.589	£2.48	35.8%
Kromek Group (AIM:KMK)	£0.049	£0.089	44.7%
Energean (LSE:ENOG)	£9.115	£14.14	35.5%
Advanced Medical Solutions Group (AIM:AMS)	£2.07	£3.53	41.4%

Click here to see the full list of 22 stocks from our Undervalued UK Stocks Based On Cash Flows screener.

Here's a peek at a few of the choices from the screener.

Entain (LSE:ENT)

Overview: Entain Plc is a sports-betting and gaming company with operations in the United Kingdom, Ireland, Italy, the rest of Europe, Australia, New Zealand, and internationally; it has a market cap of £5.35 billion.

Operations: Entain generates revenue from several segments, including £500.90 million from CEE, £2.14 billion from the UK&I, and £2.55 billion internationally.

Estimated Discount To Fair Value: 26.1%

Entain is trading 26.1% below its estimated fair value of £11.31, with a current price of £8.36, suggesting it may be undervalued based on cash flows despite reporting a net loss of £98.3 million for H1 2025 compared to a small loss last year. Earnings are forecasted to grow significantly in the coming years, and the company has successfully repriced and extended term loans, potentially improving financial stability amidst slower revenue growth than the UK market average.

• According our earnings growth report, there's an indication that Entain might be ready to expand.
• Navigate through the intricacies of Entain with our comprehensive financial health report here.

M&G (LSE:MNG)

Overview: M&G plc operates in the savings and investment sector both in the United Kingdom and internationally, with a market capitalization of approximately £6.17 billion.

Operations: The company's revenue is primarily derived from its Life (Including Wealth) segment, generating £7.57 billion, and its Asset Management segment, contributing £1.07 billion.

Estimated Discount To Fair Value: 22%

M&G is trading 22% below its estimated fair value of £3.34, with a current price of £2.61, reflecting potential undervaluation based on cash flows. Despite an expected revenue decline over the next three years, earnings are forecast to grow significantly at 41.52% annually and the company is projected to achieve profitability within this period. Recent reports show a net income of £243 million for H1 2025, reversing last year's loss, enhancing its financial outlook amidst dividend increases and strategic leadership appointments.

• The growth report we've compiled suggests that M&G's future prospects could be on the up.
• Dive into the specifics of M&G here with our thorough financial health report.

Phoenix Group Holdings (LSE:PHNX)

Overview: Phoenix Group Holdings plc operates in the long-term savings and retirement business in Europe, with a market cap of £6.60 billion.

Operations: The company's revenue segments include Retirement Solutions generating £4.46 billion, while With-profits, Europe & Other, and Pensions & Savings recorded negative contributions of -£711 million, -£785 million, and -£562 million respectively.

Estimated Discount To Fair Value: 11.1%

Phoenix Group Holdings is trading at £6.61, approximately 11.1% below its estimated fair value of £7.43, suggesting potential undervaluation based on cash flows. Despite a forecasted revenue decline of 24% annually over the next three years, earnings are expected to grow significantly at 96.26% per year with profitability anticipated in this period. Recent board changes include new appointments and retirements, potentially impacting strategic direction amidst these financial projections.

• Our expertly prepared growth report on Phoenix Group Holdings implies its future financial outlook may be stronger than recent results.
• Click to explore a detailed breakdown of our findings in Phoenix Group Holdings' balance sheet health report.

Seize The Opportunity

• Click this link to deep-dive into the 22 companies within our Undervalued UK Stocks Based On Cash Flows screener.
• Are any of these part of your asset mix? Tap into the analytical power of Simply Wall St's portfolio to get a 360-degree view on how they're shaping up.
• Elevate your portfolio with Simply Wall St, the ultimate app for investors seeking global market coverage.

Interested In Other Possibilities?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.
• Diversify your portfolio with solid dividend payers offering reliable income streams to weather potential market turbulence.
• Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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