3 UK Stocks Estimated To Be Trading At Discounts Of Up To 48.5%

The United Kingdom's stock market has recently faced challenges, with the FTSE 100 index slipping due to weak trade data from China, highlighting concerns over global economic recovery. In this environment, identifying undervalued stocks can be a strategic approach for investors seeking potential opportunities amidst broader market fluctuations.

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

Click here to see the full list of 59 stocks from our Undervalued UK Stocks Based On Cash Flows screener.

Let's dive into some prime choices out of the screener.

Warpaint London (AIM:W7L)

Overview: Warpaint London PLC, with a market cap of £304.97 million, produces and sells cosmetics through its subsidiaries.

Operations: The company's revenue segments include £2.12 million from Close-Out sales and £96.72 million from Own Brand products.

Estimated Discount To Fair Value: 34.2%

Warpaint London is trading at £3.78, significantly below its estimated fair value of £5.74, indicating it may be undervalued based on cash flows. The company's revenue is forecast to grow by 16.4% annually, outpacing the UK market's 3.8%. Despite a highly volatile share price recently and a dividend not well covered by free cash flows, analysts expect a potential price increase of 76.6%, with earnings projected to grow faster than the market average at 15.3% per year.

• The growth report we've compiled suggests that Warpaint London's future prospects could be on the up.
• Delve into the full analysis health report here for a deeper understanding of Warpaint London.

AstraZeneca (LSE:AZN)

Overview: AstraZeneca PLC is a biopharmaceutical company engaged in the discovery, development, manufacture, and commercialization of prescription medicines with a market cap of approximately £183.68 billion.

Operations: AstraZeneca's revenue primarily comes from its biopharmaceuticals segment, which generated $54.07 billion.

Estimated Discount To Fair Value: 45.5%

AstraZeneca appears undervalued with its current trading price of £118.46 below the estimated fair value of £217.18, suggesting potential for growth based on cash flows. The company is expected to see earnings grow at 16% annually, outpacing the UK market's 14.2%. Recent strategic alliances and successful clinical trials, such as those involving eneboparatide and Imfinzi, highlight AstraZeneca's commitment to innovation despite a high debt level which may impact financial flexibility.

• Our expertly prepared growth report on AstraZeneca implies its future financial outlook may be stronger than recent results.
• Dive into the specifics of AstraZeneca here with our thorough financial health report.

JD Sports Fashion (LSE:JD.)

Overview: JD Sports Fashion Plc is a retailer of branded sports fashion and outdoor clothing, footwear, accessories, and equipment for all ages across the UK, Ireland, Europe, North America, and internationally with a market cap of £4.04 billion.

Operations: The company's revenue is primarily generated from the retail sale of branded sports fashion and outdoor products, including clothing, footwear, accessories, and equipment for all age groups across various regions such as the UK, Ireland, Europe, North America, and other international markets.

Estimated Discount To Fair Value: 48.5%

JD Sports Fashion is trading at £0.78, below its estimated fair value of £1.51, highlighting its undervaluation based on cash flows. The company's earnings are forecast to grow significantly at 22.8% annually, outpacing the UK market growth rate of 14.2%. Despite a slower revenue growth rate of 7% compared to high-growth benchmarks, JD Sports offers good relative value against peers and industry standards but faces challenges with large one-off items affecting financial results.

• Our comprehensive growth report raises the possibility that JD Sports Fashion is poised for substantial financial growth.
• Click here to discover the nuances of JD Sports Fashion with our detailed financial health report.

Make It Happen

• Click this link to deep-dive into the 59 companies within our Undervalued UK Stocks Based On Cash Flows screener.
• Have you diversified into these companies? Leverage the power of Simply Wall St's portfolio to keep a close eye on market movements affecting your investments.
• Take control of your financial future using Simply Wall St, offering free, in-depth knowledge of international markets to every investor.

Curious About Other Options?

• 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com