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Rolls-Royce and Lloyds are two of the most closely followed stocks in the FTSE 100. Both have also performed wonderfully over the past three years, with share price gains of 663% and 163% respectively.
However, City analysts forecast just a 15% potential rise from their current share prices over the next 12 months. So there’s not too much of a gap at present.
Looking elsewhere though, I see a couple of FTSE 100 stocks where there’s a 30%+ disparity. Let’s zoom in to see which might be the better one to consider…
Profit warning
The two stocks are JD Sports Fashion (LSE:JD) and London Stock Exchange Group (LSE:LSEG). According to analysts, this pair could rise 30% and 37% respectively by August 2027.
Starting with JD, this has been a dud for a long time. And yesterday (20 August), shareholders got more pain as the stock dropped 15% after yet another profit warning.
These guidance downgrades have become a regular occurrence, and following this latest one brokers will probably rush to cut their price targets over the coming days. So the difference will almost certainly narrow significantly.
Basically, JD’s struggling from a highly promotional backdrop as cash-strapped consumers seek out bargains. There aren’t too many of those in the group’s stores, which like to maintain a premium pricing image. UK youth unemployment is an ongoing problem.
Now, I wouldn’t call JD stock a burning skip. The ‘King of Trainers’ is still guiding for free cash flow of £460m-£520m this financial year, and there’s an ongoing £200m share buyback programme. There’s also a modest 1.5% dividend yield.
The valuation looks cheap, but it has for ages and cheapness alone isn’t an investment thesis. I fear the stock’s going nowhere fast, except perhaps for the FTSE 250 due to JD’s lowly £3.8bn market-cap.
Lacking any meaningful catalysts on the horizon, I’m struggling to get excited here.
What about LSEG?
Turning to LSEG, as it’s known, I’m much more positive. For a start, the financial data and analytics firm is still growing, with total income excluding recoveries rising 8.4% in the first half of 2026.
For the full year, management expects that figure to be 7%-7.5%, a tightening of guidance from its original 6.5%-7.5%. LSEG hiked its interim dividend 17% and expects full-year free cash flow to be at least £2.7bn.
At first glance then, there appears there’s nothing wrong with this business. So why’s there a 37% gap between the actual and target share price?
One reason is that some investors are worried about AI’s impact on data providers like LSEG. To be fair, this could be a risk because the AI landscape’s moving fast.
However, the firm sees AI as more of an opportunity than a threat. And it’s already licencing real-time financial data to Anthropic and OpenAI, both of whom need it.
Unlike JD, the company generates recurring, subscription-style revenue. And yet the stock trades at just 16 times forward earnings, which seems too low to me. The good news is that LSEG’s buying back a record amount of shares on the cheap.
Weighing up both stocks, I reckon LSEG’s the one worth digging into.
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Ben McPoland owns shares in Rolls-Royce.
This story originally appeared on Motley Fool
