The UK’s FTSE 100 index has surged to new all-time highs, driven by strong earnings, rising commodity prices and renewed investor confidence amid global economic uncertainty.

Against this backdrop, one comparatively small-cap stock stands out for its combination of turnaround momentum and attractive valuation.

Operator of more than 1,300 pubs and hotels, Marston’s plc shares recently reached a 52-week high of 47.8 pence, taking the company’s year-to-date gain to around 13 per cent.

What particularly draws attention is its low forward price-to-earnings ratio—approximately 5.8x—well below the broader market average, suggesting that the share may be undervalued relative to its peers.

The company has reported a stronger profit outlook, signalling a step-change in its earnings trajectory following a challenging period for hospitality firms.

Savings in costs and a resurgence in demand for out-of-home socialising are supporting this shift.

Nonetheless, the business carries elevated financial leverage—a debt-to-equity ratio of about 1.9—which investors must weigh against the upside potential.

The broader stock-market rally remains supported by sectors such as energy and defence, which have enjoyed favourable global tailwinds.

However, many large-cap stocks now trade on rich valuations.

For value-oriented investors, smaller listed firms like Marston’s—capable of delivering positive earnings surprises at a modest multiple—are increasingly attractive.

While macro risks such as inflation-driven pressure on consumer spending and higher interest rates cannot be ignored, the convergence of improving fundamentals and valuation support positions Marston’s as a compelling potential opportunity.

Value-based investors prepared to tolerate some balance-sheet risk may find this pub-group stock worth closer inspection.