Finding genuine value stocks when equity markets are trading near all-time highs can feel like hunting for a needle in a haystack. But look hard enough and they do exist.
Here are two that institutional analysts believe are significantly undervalued right now, and could deliver outstanding returns over the next 10 years.
1. Victrex: a battered materials specialist
Victrex (LSE:VCT) is one of the world’s leading manufacturers of high-performance PEEK polymers. These are specialised ultra-durable, lightweight materials used in the aerospace, automotive, medical device, and semiconductor industries.
The stock’s fallen nearly 40% from its 52-week high, yet the underlying business continues to generate significant cash. As such, dividends have continued to flow, pushing the yield to a remarkable 10.1% – one of the highest in the FTSE 250.
Analysts at Berenberg and Citi are both issuing price targets of 695p and 700p respectively, suggesting that a chunky 25% discount may exist.
As Victrex’s H1 2026 results noted, revenue’s growing despite near-term margin pressure caused, in part, by inventory destocking headwinds. That’s a signal the core business and underlying demand remain intact and the company’s merely suffering from a temporary cyclical downturn.
This perfectly demonstrates the cyclical nature of Victrex’s business. And while the market will eventually recover, there’s a big question mark over the timeline of this recovery.
A prolonged slowdown in automotive and aerospace production weighs heavily on demand for PEEK polymers. And it’s why analyst opinions are split, with five recommending to Buy, six recommending to Hold, and two putting Victrex in the Sell category – a reflection of the genuine uncertainty about the pace of recovery.
2. Barratt Redrow: a deep-value housing play
Barratt Redrow (LSE:BTRW) was formed from the merger of two of the UK’s largest housebuilders, creating a business with enormous scale and a powerful position in the structurally undersupplied UK housing market.
Of the 19 analysts following the business, 15 rate the stock a Buy, with an average 12-month price target of 414p against a current share price of around 257p. That’s a 61% potential capital gain for value investors today.
And with the UK government still committed to building 1.5 million homes, the structural tailwind for housebuilders looks powerful over the next decade.
The bear case however, is real. The post-merger integration of Barratt and Redrow is still ongoing, and execution risk remains elevated. Higher mortgage rates continue to weigh on buyer affordability, and the company faces a significant fire safety remediation bill that could pressure free cash flow for years to come.
For patient investors with a 10-year horizon, these risks may prove temporary. But they shouldn’t be taken lightly.
The bottom line
Both of these value stocks are trading at meaningful discounts to analyst price targets. Of course, neither stock is a guaranteed winner. The cyclical and operational risks are very real and could leave investors bitterly disappointed.
But providing both companies continue successfully navigate their near-term challenges, I think both Victrex and Barratt Redrow are worth a deeper dive today.
After all, the best opportunities rarely come gift-wrapped, and that’s exactly what could make these two so interesting right now.
