While the market rebounded strongly last month, there are still plenty of shares trading well below their highs.
Two that have been beaten down in 2022 and could be great value now are listed below. Here's what analysts are saying about them:
Image source: Getty Images
Domino's Pizza Enterprises Ltd (ASX: DMP)
This pizza chain operator's shares have been having a very tough year. Weakness in Japan and concerns over inflationary pressures have been weighing on investor sentiment. This has led to the Domino's share price dropping 42% since the start of the year.
The team at Citi remains positive on the company and believes recent share price weakness is a buying opportunity. This is due to its very positive long term growth outlook. It said:
Our Buy rating is predicated on potential upside from potential M&A activity, upside to long term store rollout and sales on track to rebound later in CY22 once the business has cycled through the abnormal comps.
Citi has a buy rating and $92.95 price target on the company's shares.
Xero Limited (ASX: XRO)
Another ASX share that has been beaten down is Xero. It is a cloud-based accounting solution platform provider competing with the likes of MYOB, Quickbooks, and Sage.
Despite delivering a 29% increase in revenue to NZ$1.1 billion and a 28% jump in annualised monthly recurring revenue to NZ$1.2 billion in FY 2022, Xero's shares have been hammered in 2022 due to weakness in the tech sector. Since the start of the year, the Xero share price has lost 34% of its value.
The team at Goldman Sachs appear to see this as a buying opportunity for investors. Particularly given its belief that Xero can continue growing at a rapid rate for many years to come. The broker said:
While noting that the near term remains robust, we do acknowledge the risk of higher churn from SME business challenges and recent price increases. Nevertheless, we see Xero as well-placed to navigate this uncertainty given the stickiness & importance of its software, and lower levels of churn vs. AU overall. We revise FY23-25 GP [22% CAGR] to reflect FX and higher churn/ARPU growth (price increases).
Goldman currently has a buy rating and $113.00 price target on its shares.
