I’ve been looking at the latest City broker views, particularly for FTSE 100 stocks where there’s a mismatch between the forecast and current price.
Two caught my eye — each could be worth a closer look for investors hunting potentially undervalued Footsie shares.
What AI disruption?
Credit checking giant Experian (LSE:EXPN) has suffered a shocking fall from grace, slumping 33% since last summer.
On 18 May, however, UBS maintained a Buy recommendation on the stock, reiterating its 3,700p price target. If that was to come to fruition, which isn’t guaranteed of course, then investors could be looking at a 39% uplift from today’s price.
Experian has sold off in part due to market fears that AI might disrupt parts of the traditional credit-bureau business model. This is a key risk moving forward.
Yet UBS points out that Experian’s core datasets are proprietary and highly integrated into workflows. Instead of being replaced, Experian is successfully implementing its own AI-driven products while continuing to expand into areas like advanced verification and fraud prevention.
Here are some forward-thinking deals announced by Experian recently:
- It has built the UK’s first credit score tool natively inside ChatGPT.
- Embedding analytics data directly into ServiceNow workflows so corporate AI agents can instantly approve loans or flag fraud.
- It has formed a security layer for agentic AI shopping with cybersecurity firm Akamai (helping block malicious bots).
Back in February, UBS said it was comfortable modelling 10% earnings growth over the medium term. Yet after the sharp pullback, Experian’s trading at just 18 times forward earnings.
If the firm can continue compounding and quell fears about AI disruption, then the stock is almost certainly undervalued today. The City certainly thinks so, with the average price target among analysts sitting almost 50% higher at 4,048p.
Note, Experian reports its full-year results tomorrow (20 May), when it’s expected to post 8% organic revenue growth. But all eyes will be on the outlook for FY27 given the ongoing macroeconomic uncertainty.
Luxury recovery play
The second Footsie stock is luxury fashion group Burberry (LSE:BRBY). The shares have slumped 49% in five years.
However, that hasn’t stopped Deutsche giving the stock a 1,480p price target (35% higher). That would be a welcome outcome for shareholders, who’ve watched Burberry’s sales struggle amid global inflation and weakness in China.
Burberry also went after more affluent customers, but its existing shoppers baulked at the new ultra-luxury prices. Under CEO Joshua Schulman, though, the 170-year-old brand is plotting a turnaround centred upon cost-cutting and refocusing on its iconic trench coats and scarves.
Looking at the FY26 results, there are some very encouraging signs. For a start, Burberry returned to comparable sales growth from Q2, culminating in double-digit growth in Greater China and Americas in Q4.
Meanwhile, adjusted operating profit jumped from £26m to £160m. E-Commerce sales were up strongly, particularly among younger shoppers, and bag sales (including the newer Cotswolds bag) are doing well again.
The biggest current risk is rising inflation, which might cause aspirational shoppers to tighten belts again. Management is cautious for FY27.
But with early signs that Burberry is reinvigorating the brand, a forward earnings multiple of 25 could end up looking cheap a few years from now. As such, I reckon the stock’s worth a closer look.
Ben McPoland has no positions in any of the companies mentioned.
