2 of the cheapest FTSE 100 stocks to consider buying as we head into 2026
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As investors, we all have a shared desire to try to avoid overpriced companies and buy cheap ones FTSE 100 shares. In theory, over time, undervalued stocks should enjoy a return to fair value, bringing profits to those who bought cheap. Using a popular metric, here are the two current cheapest options.
A fallen angel
I am referring to the price-to-earnings (P/E) ratio. This is a common gauge used to assign a value to a company, based on the current share price relative to recent earnings per share. A low value usually indicates that the company is undervalued, although a buying decision should not be based solely on this number. I use the figure of 10 as a measure of comparison.
The first company WPP (LSE:WPP). This is a controversial choice, given that the share price has fallen by 60% in the past year. The main result of this has been several reductions in its sales and profit outlook for the year 2025. This is blamed on clients tightening marketing budgets and voluntarily reducing ad spending. This remains a risk going forward.
However, I feel that the stock has fallen to the point where it looks very cheap, with a P/E ratio of 6.50. There are several reasons why we could see a bounce back in 2026.
It is investing heavily in AI-driven tools and data platforms. This can pay off big if clients start going back to agencies that can provide improved information. In addition, a major turnaround plan is just getting started, after new CEO Cindy Rose took over in September. In the next six months or so, signs of progress should become more visible.
Starting the engines
Another stock EasyJet (LSE:EZJ). The stock price is down 11% over the past year, with a P/E ratio of 7.67.
Despite a strong set of annual results released in November, there were factors that contributed to poor performance this year. For example, revenue per available seat kilometer (RASK) decreased by 3% compared to last year. I read a note from the commentators on JP Morgan earlier in the month it flagged that the business was facing price pressure on fares in the highly competitive short-haul market.
Although those are risks that need to be watched closely, I think the market is too pessimistic about easyJet. Headline EBIT for the 2025 financial year was £703m, up 18% from 2024. It is becoming more and more diverse in the distribution of income in different areas. For example, profit accumulation has been split equally between the airline’s operations and the holiday division. This should bode well going forward.
I think some investors are still worried about what happened during the violence. It was really a difficult time for this company. But this was a black swan event. EasyJet has recovered significantly and is arguably in a better position now than before the pandemic hit. Therefore, as people become more comfortable with the idea that another pandemic is probably not around, the price of EasyJet should rise again.
I believe both stocks are well priced right now and can be considered by investors.
