Since the end of February, the FTSE 100‘s seen just over 5% of its value slip in the face of escalating geopolitical turmoil. Yet, even after this recent tumble, the UK stock market remains near all-time highs. However, that doesn’t mean there aren’t exciting opportunities for investors to explore.
Even with the UK’s flagship index sitting comfortably above 10,000 points, several institutional analysts have highlighted some seemingly terrific bargains to consider. And even someone investing as little as £10 a day (roughly £300 a month) can use these bargains to build a seven-figure ISA. Here’s how.
Compounding to £1m
By taking advantage of discounts in top-notch stocks and avoiding value traps trying to lead investors astray, a portfolio can go on to earn impressive returns that outpace the market.
To demonstrate, the average long-term return of the FTSE 100 has historically sat near 8% a year, including dividends. Investing £300 each month at this rate would grow a brand-new ISA beyond the £1m threshold in around 40 years.
By comparison, if an investor capitalising on bargain-buying opportunities achieved an 11% average return, just 3% more, the journey is shortened to 32 years.
So what are the cheap FTSE 100 stocks investors should be looking at today?
What the experts are recommending
There are a lot of ideas floating around among professional analysts in 2026. However, one FTSE 100 stock that seems to be a recurring name is Berkeley Group (LSE:BKG).
The analysts’ teams at JP Morgan, Berenberg Bank and Barclays have all recently reiterated a Buy recommendation with share price targets ranging 4,500p-5,230p.
Compared to where the stock’s trading today, that represents a potential 16%-35% capital gain over the next 12 months.
So what’s driving this aggressive forecasting?
Digging deeper
Berkeley is a specialist in brownfield and urban regeneration homebuilding. But instead of focusing on high volumes like more traditional homebuilders such as Taylor Wimpey, Berkeley’s more focused on complex, unique projects, such as converting obsolete office blocks or former industrial sites.
In recent years, the group’s had to tackle a number of headwinds plaguing the property sector, the most prominent being higher interest rates, which have had an outsized impact on Berkeley’s core markets like London.
This has translated into a bottom line that’s been steadily shrinking since 2022. Yet that could all be about to change.
With interest rates slowly coming down, property specialist Savills has projected that London house prices are on track to recover and will rise by 14% by 2030. This improved price environment creates a supportive tailwind for Berkeley, with management even projecting a potential rebound in earnings later this year.
This momentum could be further supported by the government’s planning reforms designed to simplify the whole process and reduce costs for homebuilders. But it’s worth pointing out that this might be a double-edged sword. After all, if planning permission’s easier to obtain, the barriers to entry from smaller competitors also fall.
Forecasts are never perfect. And Berkeley could end up falling short of its own targets if interest rate cuts are delayed due to a resurgence in inflation. Nevertheless, with an optimistic outlook and an undemanding price-to-earnings ratio of just 10.7, this FTSE 100 stock might be worth a closer look.
