While the market volatility this year has been very disappointing, it could have created some very attractive buying opportunities for patient investors.
For example, listed below are a couple of ASX 200 shares that have been beaten down this year but are tipped to rebound strongly from current levels.
In fact, the team at Morgans believe they each offer potential upside of greater than 50% over the next 12 months. Here's what you need to know:
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Domino's Pizza Enterprises Ltd (ASX: DMP)
The first ASX 200 share that Morgans believes could rocket higher is Domino's. It is a leading pizza chain operator with operations across the ANZ, Asian, and European markets.
Morgans is positive on the company due to its store expansion plans. It explained:
The engine of DMP's growth is its ability to roll out new stores all over the world. It added 438 stores to its global network in the year to June 2022, a pace of expansion that we forecast to accelerate to nearly 600 in FY23. This will take the total to almost 4,000 stores, up fourfold over a ten-year period. Over the next ten years, DMP expects to grow organically to 7,250 stores in the 13 countries in which it currently operates. This means DMP expects to more than double in size again by 2033, not including any future acquisitions.
Morgans has an add rating and $90.00 price target on the company's shares. Based on the current Domino's share price of $56.61, this implies potential upside of 59%.
Nextdc Ltd (ASX: NXT)
Another ASX 200 share that Morgans believes has major upside potential is NextDC. It is a leading data centre operator that it is exposed to structural tailwinds such as the shift to the cloud.
Morgans is expecting another strong year for NextDC in FY 2023 and suspects that it could outperform its guidance. It explained:
NXT should deliver another good set of results in FY23 with some upside risk to guidance, in our view. Structural demand for cloud and colocation remains incredibly strong. NXT's new S3 and M3 data centres are now open. Consequently, we expect significant new customer wins over the next six-to-twelve months (including CSP options being exercised). Sales should drive the share price higher. NXT looks comfortably on-track to generate over $300m of EBITDA in the next three to five years.
Morgans has an add rating and $13.30 price target on the company's shares. Based on the current NextDC share price of $8.79, this suggests potential upside of 51% for investors.
