Lithium and cheese: Bell Potter tips 20%+ returns from these ASX 200 stocks

Big gains could be coming from very different sides of the market.

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Forget chalk and cheese, lithium and cheese is about as different as it gets on the Australian share market.

But funnily enough, they do share one thing in common. That is that the potential for some very big returns on the Australian share market.

That's the view of analysts at Bell Potter, which have just named a couple of ASX 200 stocks specialising in these products as buys.

Here's what you need to know:

Bega Cheese Ltd (ASX: BGA)

Bell Potter has retained its buy rating on this diversified food company's shares with a $5.00 price target. This implies potential upside of almost 25% for investors over the next 12 months.

Its analysts believe that the ASX 200 stock is trading at an unwarranted discount and suspect it could soon rerate materially. The broker said:

Our Buy rating is unchanged. While the share price has bounced from the bottom, BGA continues to trade at an unreasonably high discount to its historical EV/EBITDA multiple (12.4x 10yr average) and its dairy FMCG peer group (12.3x FY24e EBITDA). Commodity prices (particularly SMP) have rallied from the low and the $250m EBITDA target pathway is becoming clearer. Continued execution against this target has the scope to see the BGA share price lift materially in outward years.

Mineral Resources Ltd (ASX: MIN)

Another ASX 200 stock that the broker is bullish on is mining and mining services company Mineral Resources. This morning, the broker retained its buy rating and $75.00 price target on its shares. This suggests potential upside of 23% for investors.

Bell Potter likes the company due to its production growth plans. It highlights:

Our twelve-month forward valuation for MIN is based on a DCF based valuation of our production scenarios for MIN's Mining Services, Lithium, Iron Ore and Energy operations and projects. MINs businesses are in a period of significant growth. Over the next two-years Lithium and Iron Ore production quantities will grow substantially, accompanied by associated increases in contracted Mining Services volumes.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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