Prudent investors in ASX shares will no doubt be breathing easier on Wednesday following the recent market volatility. However, visibility on what's next is not clear.
It was Roman author Pliny the Elder who wrote "In wine, there is truth".
But markets reveal their own truth, eternalised by none other than the great Warren Buffett's saying: "When the tide goes out, we see who's been swimming naked".
As many of the retail investor lambs were fleeced this past week, big institutional wolves subsequently came in and gobbled up the leftovers, according to Goldman Sachs.
This tells me to remain constructive on ASX shares for the long term, as 'smart money' is putting its money where its mouth is – even if that mouth is very shark-like.
So, if you're looking for ASX stocks that analysts believe could see substantial gains in the future, stick around. Here are three.
ASX shares to lift
There are actually a few candidates to mention here, but I've narrowed it down to three with strong broker support.
Mineral Resources Ltd (ASX: MIN) is the first name. It's currently trading at $52.30 per share, down 10% in the past month.
Analysts at Bell Potter are optimistic about the lithium miner, forecasting significant production growth that could drive earnings higher.
This increased capacity could see the ASX share benefiting from lower unit costs and tighter commodity prices.
The broker rates Mineral Resources a buy with a price target of $80 per share, implying a 52% upside from current levels.
Fund managers L1 Capital also like the stock. According to my colleague Tristan, it noted that its business divisions all "have favourable medium-term tailwinds", and that it "remains significantly undervalued".
Liontown Resources Ltd (ASX: LTR)
Liontown Resources has had a tough year, but it could be worth considering, particularly for those with a higher risk budget.
The ASX share is trading at 90.5 cents per share at the time of writing, down more than 67% in the last year.
Bell Potter maintains a speculative buy rating on Liontown. According to my colleague James, in a July note, the broker doubled its price target to $1.90 per share.
This suggests a potential upside of 110% over the next year.
Bell Potter says Liontown's Kathleen Valley Lithium Project is progressing well, with spodumene concentrate production set to commence soon. The project is nearly complete, with underground and open-pit mining advancing as planned.
Goldman Sachs also projects revenues to grow at a 74% compounding rate from $143 million in FY25 up to $1.32 billion by FY29.
It values the ASX share at $1.15 apiece, not quite a 50% return, but around 27% upside potential instead.
Neuren Pharmaceuticals Ltd (ASX: NEU)
Neuren Pharmaceuticals is also making waves in the healthcare sector with its innovative treatments for neurodevelopmental disorders.
The ASX share was put on ice today pending an announcement for its NZ-2591 compound, indicated in the treatment of various neurodevelopment disorders.
Neuren also posted its Q2 results on Wednesday, along with the second quarter results of its partner, Acadia Pharmaceuticals Inc (NASDAQ: ACAD).
The major takeout from the quarter was the royalties it booked on Acadia's sales of its Rett syndrome treatment, Daybue.
Acadia's Daybue sales were US$84.6 million during the quarter, earning Neuren AUD$13 million in royalty income from this.
Bell Potter is bullish on the ASX share. It projects that Neuren shares could reach $28.00 apiece, a 63% increase from current levels.
Takeout
According to top brokers, Mineral Resources, Liontown Resources, and Neuren Pharmaceuticals are three ASX shares with substantial growth potential.
Each company has individual drivers. But as always, ensure you conduct your own due diligence and consider your investment goals before making any decisions.
