Top 3 Undervalued FTSE Stocks to Watch This October

Potential Bargains for Long-Term Investors Seeking Growth Opportunities

As we move through October, many investors are scouring the FTSE for undervalued stocks that offer solid long-term potential. While the broader market remains uncertain, a few standout companies are trading at attractive valuations and could provide strong returns over time.

Here are three FTSE-listed shares currently catching investor attention, based on their low price-to-earnings (P/E) ratios, recent performance, and market positioning.

1. 3i Group (LSE: III)

A Steady Performer with European Retail Exposure

Private equity and infrastructure giant 3i Group has quietly been one of the FTSE 100’s best performers in 2025. Its largest asset, Action, a rapidly expanding European discount retailer, continues to drive growth.

• Share performance: Up around 21.5% year-to-date
• Forward P/E ratio: 6.52 – considered low for its earnings trajectory
• Financial strength: Strong liquidity, with a quick ratio of 3.31
• Risk factor: Heavy reliance on Action means earnings could suffer if the retailer falters

Despite some concentration risk, 3i’s robust portfolio and reliable returns make it an attractive pick for value-focused investors.

2. easyJet (LSE: EZJ)

Turbulence May Present a Buying Opportunity

Budget airline easyJet has endured a rough few months, with a cyberattack in September knocking investor confidence and wiping around 12% off its share price. However, the fundamentals suggest a different story.

• Forward P/E ratio: 7 – suggesting the stock is undervalued
• Year-on-year growth: Revenue and earnings up 9.5%
• Operating cash flow: £1.64bn, supporting ongoing investment
• Challenges: Debt slightly exceeds equity, with regulatory threats in Spain over baggage charges

Travel demand remains resilient, and easyJet's management is focusing on streamlining operations. If the airline avoids further shocks, its current valuation may present a compelling rebound opportunity.

3. JD Sports (LSE: JD)

A High-Street Favourite with Turnaround Potential

JD Sports has seen its share price fall around 28% over the past 12 months, largely due to margin pressures and concerns about its debt profile. But the company is showing signs of fighting back.

• Valuation: Forward P/E ratio of 7
• Share buyback: £100m programme signals management confidence
• Free cash flow: £853m – indicates strong operational performance
• Risks: High debt (£3.74bn) and liabilities outweighing assets

JD’s declining margins are a concern, but its strong cash flow and shareholder-friendly actions suggest it may be oversold. For investors willing to tolerate short-term volatility, JD could offer significant upside.

Final Thoughts: Are These FTSE Stocks Worth the Risk?

Each of these companies comes with its own risk profile — whether it's sector concentration, financial leverage, or operational setbacks. However, they also offer:

• Low valuations relative to earnings
• Positive recent performance or strong fundamentals
• Turnaround or growth potential over the coming 6–12 months

For investors seeking value in an otherwise cautious market, 3i Group, easyJet, and JD Sports are three names worth keeping on the radar. As always, due diligence is essential, and these shares may be better suited for medium- to long-term strategies rather than quick gains.

Source: (Fool.com)