Although the S&P/ASX 200 Index (ASX: XJO) has been racing higher this week, that doesn't mean that there aren't any big potential returns on offer for investors.
For example, two ASX 200 stocks that have been tipped as buys with 20%+ potential returns are listed below. Here's what you need to know about them:
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Domino's Pizza Enterprises Ltd (ASX: DMP)
Analysts at Morgans believe that there's a lot of value on offer with this ASX 200 stock. While the broker has been disappointed with the pizza chain operator's performance this year, it believes it will rebound in time. This could make it an opportune time to snap up shares.
In our view, DMP's track record of superior operating performance has come off the rails in the past 18 months as it has taken the wrong approach to trying to mitigate inflation through the imposition of service fees. This misstep has been exacerbated by a global shift away from delivery and by relentless input cost inflation. But we don't think the business is incapable of making a comeback and think it's one to watch.
Morgans has an add rating and a $60 price target on Domino's shares. This suggests a potential upside of 20% from current levels.
Lovisa Holdings Ltd (ASX: LOV)
Bell Potter believes that Lovisa is an ASX 200 stock to buy right now. The broker rates the fashion jewellery retailer highly thanks to its global expansion opportunity. It explains:
We view LOV as a key pick in our Retail sector coverage with its ability to execute on the large global roll-out opportunity as a strong player in the fashion jewellery market while remaining relatively better immune to consumer spend pressures given the accessibility of the product from a price point perspective, once comps normalise.
Bell Potter has a buy rating and a $30.50 price target on its shares. This implies a potential upside of over 50% for investors over the next 12 months.
