The share market has historically delivered investors a return of 10% per annum.
While this is a very good return, there are some ASX shares that have been tipped to rise significantly more than this over the next 12 months.
Let's take a look at three ASX shares that analysts believe have market-beating potential:
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Amotiv Ltd (ASX: AOV)
The first ASX share that could have plenty of upside is Amotiv. Until recently, it was known as GUD Holdings. It is a diversified automotive parts company and the name behind brands such as Narva and Ryco.
Morgans is a fan of the company and has an add rating and $13.71 price target on its shares. This implies potential upside of 30% for investors. It commented:
GUD is a high-quality business with an entrenched market position in its core operations and deep growth opportunities in new markets. We view GUD's investment case as compelling, a robust earnings base of predominantly non-discretionary products, structural industry tailwinds supporting organic growth and ongoing accretive M&A optionality. We view the ~12x multiple as undemanding given the resilient earnings and long-duration growth outlook for the business ahead.
Endeavour Group Ltd (ASX: EDV)
Over at Goldman Sachs, its analysts believe this drinks giant's shares are cheap. Last week, the broker reaffirmed its buy rating with an improved price target of $6.50. Based on where the ASX share is currently trading, this suggests that upside of 28% is possible for investors.
The broker likes Endeavour due to its defensive qualities and attractive valuation. It commented:
Our Buy thesis on the stock is based on the following key drivers: 1) Market share gain (already 40% market share) in defensive alcohol retail from consumer data and loyalty advantages; 2) Organic reopening beneficiary with its hotels/pubs business back to pre-COVID sales/property. We believe EDV is trading at a relatively attractive valuation, with potential downside from EGM tax changes already fully priced in.
Lynas Rare Earths Ltd (ASX: LYC)
Bell Potter thinks that this rare earths producer's shares are undervalued at current levels. Last week, the broker put a buy rating and $7.80 price target on its shares. This implies potential upside of 31% for investors over the next 12 months.
Its analysts believe that rare earths prices are close to rebounding from recent weakness. It said:
We continue to see prices painstakingly grind higher from current levels through to the end of the year. China domestic supply may continue to keep a lid on rapid price revisions, however not at current levels. Reports of activity over March highlighted a reduction in NdPr oxide imports into China and a reluctance of domestic miners to sell material to downstream magnet makers whose stockpiles were bottoming out. Combine this with a rapid rise in EV production globally and you have a more positive outlook for NdPr.
