The FTSE 100 may be riding a record-breaking rally, but analysts believe the UK’s flagship index still has significant room left to run.
Forecasters at The Economy Forecast Agency have projected the index could reach approximately 13,378 within the next year, representing a gain of roughly 24% from current levels.
Such bullish forecasts naturally warrant caution, as enormous gains of this magnitude are never guaranteed and conditions can shift rapidly.
However, for stock pickers willing to concentrate capital in the right positions, the potential returns from any sustained rally could prove even more impressive than the broader index gains.
Two stocks in particular are drawing attention from institutional analysts as cheap candidates positioned to outperform the wider market.
Barclays (LSE: BARC) has undergone a significant transformation in recent years, yet despite meaningful progress the stock still trades at just 7.1 times forward earnings.
Pre-tax profits jumped 17% to £6.1bn over the first half of 2026, with return on tangible equity rising from 13.2% to 14.8%, underscoring the strength of the bank’s ongoing recovery.
Management has raised its full-year 2026 income expectations to £31.5bn, while allocating a further £2.3bn to dividends and share buybacks, signalling considerable confidence in the outlook.
UBS has issued a price target of 600p for Barclays shares, a level approximately 31% above where the stock currently trades.
Reaching that target, however, depends on Barclays successfully controlling costs, maintaining credit quality, and delivering stable investment banking earnings, none of which are guaranteed in a slowing economy.
The second candidate is Entain (LSE: ENT), the gambling group behind well-known brands including Ladbrokes, Coral, and bwin.
Entain shares have collapsed by 45% since the start of the year, weighed down by concerns over taxes, regulation, debt levels, and underwhelming performance in markets such as Brazil.
Despite those headwinds, first-half net gaming revenue rose 5% at constant currencies, driven by 7% online growth, while EBITDA reached £479m and beat expectations.
Management continues to target online net gaming revenue growth of between 5% and 7% for the full year, with margins expected to reach between 21% and 22%.
Entain is also pursuing £100m in annual cost savings by the end of 2027, while aiming to push cash flows above £500m by 2028, though these remain ambitious targets.
Following the steep sell-off, some analysts believe the valuation has fallen so far that even modest evidence of delivery could trigger a dramatic re-rating, with some projecting a rebound of roughly 120% over the next 12 months.
Entain is undoubtedly the riskier of the two plays, but for investors comfortable with volatility, its beaten-down valuation and improving underlying metrics may warrant a closer look.
Both stocks appear to be at an interesting juncture, and if their respective management teams can execute, the conditions for significant upside gains may already be in place.