Are you looking for some ASX growth shares with the potential to generate strong returns? Well, read on if you are!
That's because the two listed below have been named as buys this month and given price targets implying at least 20% upside over the next 12 months.
Here's what analysts are saying about these ASX growth shares:
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Lovisa Holdings Ltd (ASX: LOV)
The first ASX growth share that could have major upside potential is Lovisa. It is the fashion jewellery retailer with a rapidly growing global store network.
It is this store network growth that is getting Morgans excited about the company. Earlier this month, the broker commented:
LOV grew substantially in FY23 to finish the year with an 801-store network in 39 countries. We believe it plans to enter mainland China in FY24, paving the way for significant longer-term growth […] We have increased our long-run earnings estimates.
Morgans has an add rating and a $27.50 price target on its shares. This implies a potential upside of 22% over the next 12 months.
TechnologyOne Ltd (ASX: TNE)
Another ASX growth share that could have plenty of upside is enterprise software company TechnologyOne.
That's the view of analysts at Goldman Sachs, which are feeling particularly positive on the company's outlook. This is due to its defensive end markets and sector tailwinds. The broker commented:
We highlight the defensiveness of TNE's core end markets of Local Government (35% of 1H23 ARR) and Education (25%), and the public sector more broadly (>75%), with growing IT spending supported by revenue streams including council rates and government funding. We see TNE's +10-15% FY23E PBT growth guidance as conservative, and believe that TNE can grow PBT >15% p.a. across FY23-25E driven by its strong ARR outlook (+18% FY22-25E CAGR) and modest margin expansion (+220bps FY22-25E).
Goldman Sachs currently has a buy rating and a $18.30 price target on Technology One's shares. This implies a potential upside of 20% from current levels.
