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The FTSE 100 rose a powerful 22% over the course of 2025. However most of the UK’s blue-chip shares endured a far bumpier journey.
Barratt Redrow (LSE:BTRW) and Sage Group (LSE:SGE) noticed their share costs fall by double-digit percentages final yr. Dangers stay within the New 12 months. However I’m assured that enhancing buying and selling circumstances — mixed with their ultra-low valuations — might see them outperform the FTSE index in 2026.
Wish to know why? Learn on.
Constructing momentum
Fears of a sluggish restoration in UK residence gross sales brought on Barratt Redrow shares to stoop in 2025. Over a 12-month horizon, Britain’s greatest housebuilder has dropped 13% in worth.
I felt on the time that 2025’s worth drop was unjustified. Home worth information right this moment (19 January) has strengthened my view, illustrating the underlying power of the market.
In line with Rightmove, common asking costs have risen 2.8% in January. This was the most important ever start-of-year leap, and the most important month-to-month enhance since 2.8%.
Would possibly this be a one-off spike? I’m assured it might really mark a turning level, and anticipate gross sales and worth momentum to enhance. Additional Financial institution of England rate of interest cuts are within the pipeline to spice up purchaser affordability. There’s additionally a bloody warfare being fought out as to which lender can present one of the best mortgage product.
Barratt’s rock-bottom share worth boosts my prediction of a share worth restoration this yr. At 375.7p, the inventory trades on a ahead price-to-book (P/B) ratio of 0.6.
That’s effectively under the 10-year common of 1.1. And it exhibits the FTSE 100 builder buying and selling at a wholesome low cost to the worth of its belongings.
Like all share, Barratt Redrow comes with danger. My very own private concern is a pointy downturn within the UK financial system that offsets the advantages of falling rates of interest. Nonetheless, on steadiness, I believe it may rebound sharply following latest weak point. And over the long term, I believe it’s going to steadily rise as enhancing planning guidelines assist it elevate volumes to capitalise on the booming home inhabitants.
One other FTSE 100 cut price
Sage Group (LSE:SGE) endured even meatier share worth losses in 2025. The software program provider is now down 21% over 12 months, falling because the market reevaluated its development prospects.
This FTSE 100 share’s a pacesetter within the accounting, payroll, and human sources software program sector. The issue is that gross sales development — whereas nonetheless spectacular final yr — failed to fulfill market expectations. Recurring revenues jumped 11% within the monetary yr to September.
With fears over an AI bubble rising, too, Sage confronted an ideal storm that pulled its shares decrease. The corporate’s investing closely in synthetic intelligence, and launched merchandise like its Sage Copilot device in 2025.
Nevertheless, I believe this drop might symbolize a pretty dip-buying alternative for long-term traders. In truth, I believe Sage’s share worth might rebound as quickly as this yr. Enterprise spending might rise sharply as rates of interest fall and financial exercise picks up. And people AI instruments give it enhanced energy to capitalise on any uplift.
Sage trades on a ahead price-to-earnings (P/E) ratio of simply 21.3 occasions. That’s under a studying of round 34 occasions for the broader European info expertise sector, and makes the share price severe consideration from worth traders.
