3 UK Stocks That May Be Undervalued In January 2026

The UK stock market has recently faced challenges, with the FTSE 100 and FTSE 250 indices both closing lower amid concerns over weak trade data from China, highlighting the interconnectedness of global economies. In such an environment, identifying undervalued stocks can be crucial for investors seeking opportunities that may offer potential value despite broader market uncertainties.

Click here to see the full list of 60 stocks from our Undervalued UK Stocks Based On Cash Flows screener.

Underneath we present a selection of stocks filtered out by our screen.

Overview: Hochschild Mining plc is a precious metals company involved in the exploration, mining, processing, and sale of gold and silver deposits across Peru, Argentina, the United Kingdom, Canada, Brazil, and Chile with a market cap of £2.95 billion.

Operations: Hochschild Mining’s revenue segments include $320.31 million from San Jose, $186.58 million from Mara Rosa, and $568.64 million from Inmaculada.

Estimated Discount To Fair Value: 48.9%

Hochschild Mining is trading at £5.73, significantly below its estimated fair value of £11.22, indicating it may be undervalued based on cash flows. Despite a volatile share price and recent production declines in both gold and silver, the company forecasts strong earnings growth of 40.8% annually over the next three years, exceeding UK market averages. Revenue is also expected to grow faster than the broader market at 11.6% per year, supporting its undervaluation thesis.

LSE:HOC Discounted Cash Flow as at Jan 2026

Overview: Pan African Resources PLC is involved in the mining, extraction, production, and sale of gold in South Africa with a market cap of £2.59 billion.

Operations: The company’s revenue segments include MTR Projects ($87.34 million), Evander Mines ($206.17 million), Tennant Mines ($3.87 million), Barberton Mines ($242.19 million), and Agricultural ESG Projects ($0.46 million).

Estimated Discount To Fair Value: 21.8%

Pan African Resources, trading at £1.28, is priced below its estimated fair value of £1.63, highlighting its potential undervaluation based on cash flows. The company forecasts significant earnings growth of 31.3% annually over the next three years, outpacing UK market averages. Recent inclusion in multiple FTSE indices and strategic developments at the Soweto TSFs project further bolster its investment appeal by enhancing production capabilities and operational efficiencies with reduced costs and improved financial returns.

LSE:PAF Discounted Cash Flow as at Jan 2026

Overview: Raspberry Pi Holdings plc designs and develops single-board computers, compute modules, and semiconductors for various regions including the United Kingdom, Europe, the United States, Asia Pacific, and internationally with a market cap of £561.39 million.

Operations: The company’s revenue primarily comes from its computer hardware segment, generating $251 million.

Estimated Discount To Fair Value: 11.7%

Raspberry Pi Holdings, trading at £2.9, is below its estimated fair value of £3.28, indicating potential undervaluation based on cash flows. Earnings are forecast to grow significantly at 46.2% annually, surpassing UK market averages. Despite recent executive changes with the CFO planning to step down in 2026, the company remains poised for growth with revenue expected to rise by 16.8% per year, although current profit margins have decreased from last year.

LSE:RPI Discounted Cash Flow as at Jan 2026

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include LSE:HOC LSE:PAF and LSE:RPI.

This article was originally published by Simply Wall St.

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