Finding a genuine value stock when markets are near record highs isn’t easy. But institutional analysts have been quietly building conviction in a handful of FTSE 100 names they believe the wider market is still significantly underpricing. And two in particular are standing out right now.
1. Taylor Wimpey: a discounted housing recovery play
Taylor Wimpey‘s (LSE:TW.) one of the UK’s largest residential housebuilders, and it currently trades at a meaningful discount to its long-run historical average.
While the majority of institutional analysts covering the stock hold a Hold rating today, a meaningful minority still rate the stock a Buy or Outperform. And there’s a compelling structural case to be made about this potential value stock.
In 2026, the UK housing market is still chronically undersupplied. And the government’s commitment to building 1.5 million new homes over the current parliament provides a powerful policy tailwind that should sustain demand for years.
Of course, there’s some understandable uncertainty about whether the UK government will actually hit that target, especially in the currently volatile political climate. Nevertheless, with almost all political parties in favour of building more homes, this long-term dynamic gives Taylor Wimpey a durable platform to grow into.
Operationally, the business is in better shape than its share price implies. Completions are recovering from post-pandemic lows, the order book’s rebuilding, and management’s maintained a progressive dividend policy through the downturn – an encouraging signal of genuine confidence in the outlook.
The risks are real though. With interest rates stuck in a holding pattern amid ongoing uncertainty in the Middle East, the expected improvement in mortgage affordability has yet to fully materialise. And this more expensive mortgage environment is blocking many first-time buyers from getting on the housing ladder.
Build cost inflation from labour and materials continues to squeeze margins, and planning delays also remain a persistent drag on delivery timelines.
2. RELX: a quality compounder hiding in plain sight
RELX (LSE:REL) is a data and analytics group serving the legal, insurance, scientific, and exhibition sectors. And even with all the recent price fluctuations, the company has continued to deliver consistent payouts to its shareholders. In fact, the company has now delivered 15 consecutive years of dividend growth an annual average 8.6% hike.
Full-year 2025 results showed adjusted revenue up 7% to £9.59bn and operating profit up 9% to £3.34bn. CEO Erik Engstrom captured the bull case clearly:
“The continued evolution of artificial intelligence is enabling us to add more value to our customers, as we embed additional functionality in our products, and to develop and launch products at a faster pace.”
But despite management’s confidence in the value-adding benefits of AI, the technology also opens the door to potential disruption.
If cheaper AI tools erode the perceived uniqueness of RELX’s proprietary data, corporate customers may cut back on their licenses and spending in favour of cheaper ‘good enough’ alternatives – a real threat that’s behind most of the recent volatility.
What’s the verdict?
Both stocks come with genuine risks. But they also show exciting promise for contrarian investors hunting for potential value stocks. Out of the two, I think RELX has the most potential due to its lower reliance on wider external market forces. But I’ve already added both companies to my watchlist.
Should you invest £5,000 in RELX right now?
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Zaven Boyrazian does not hold any positions in the companies mentioned.
