Here’s a high-momentum FTSE 100 stock that still looks undervalued

Much as in in sport, momentum can be a powerful force in investing. Often, stocks that are trending up are able to continue rising for an extended period. Now, one FTSE 100 stock I hold in my ISA has a great deal of upward momentum at present. Here’s the name of the company and a look at why I believe the stock has the potential to keep rising.

A top-performing insurance stock

The Footsie company in focus today is Prudential (LSE:PRU). It’s a well-established insurance company that’s focused on the high-growth markets of Asia and Africa.

This stock has underperformed over the last few years due to economic weakness in China. Yet recently, it’s been making an incredible comeback.

Over the last three months, it has risen about 17%. Over the last six, it has climbed about 37%.

It still looks undervalued

I believe the upward trend here has plenty of room to run. There are a few reasons why.

For starters, the stock remains well below its highs. Four years ago, the share price was almost 100% higher than it is today.

Second, it still looks really cheap today. Currently, analysts expect Prudential to generate earnings per share (EPS) of $1.03 this year and $1.18 next year so we’re looking at a price-to-earnings (P/E) ratio of 11.7, falling to 10.2 using the FY2026 EPS forecast.

It’s worth highlighting the earnings growth expected next year (around 15%). That’s decent and it could help to push the share price higher.

One factor helping earnings growth is share buybacks. Recently, Prudential has been buying back a load of its own stock (which suggests that management views the stock as cheap).

Brokers are bullish

Third, recent broker activity here has been constructive (this can also help to boost a stock). For example, earlier this month, analysts at Deutsche Bank upgraded Prudential shares from Hold to Buy and raised their target price from 900p to 1,000p (about 13% above the current share price).

Long-term growth potential

Finally, the long-term potential here is immense. In China, for example, the life insurance industry is forecast to grow at a compound annual growth rate (CAGR) of 9% between 2024 and 2028, from $597bn to $893bn.

This market growth – and growth in other Asian countries such as Indonesia, Philippines, and Vietnam – should provide strong tailwinds for the company. Given its exposure to these markets, the company is far more scalable than most other FTSE insurers.

I’m bullish

Now, there’s no guarantee that the share price will continue rising from here, of course. Economic weakness across Asia is a risk that could derail my bull case.

Another risk is a market-wide pullback. This scenario could see the stock lose its momentum.

All things considered, however, I’m bullish on Prudential. I believe it’s worth considering as a long-term investment today.