Looking to position yourself for the next bull market? Experts say these two ASX shares are poised to make significant gains and could help lead the charge in the next big market rally.
The two names on analysts' radars are Domino's Pizza Enterprises Ltd (ASX: DMP) and Telstra Group Ltd (ASX: TLS).
Both companies have reported earnings recently and are now well into the new financial year on the business side.
Let's explore why analysts are bullish on these 2 ASX shares.
ASX shares well-positioned
Domino's Pizza finished trading on Wednesday 1% lower at $29.65 per share. It faced operating challenges in FY24, which saw the ASX share wobble.
Despite a 1.9% drop in net profit and a 4% reduction in dividends, Domino's management remains positive for the future.
CEO Don Meij highlighted the company's efforts to reduce costs and introduce new products. He also pointed to plans to improve the underperforming French market by partnering with companies like Uber to reach more customers.
Analysts also believe the worst is over. Soon after its release, Goldman Sachs reaffirmed its buy rating on Domino's, setting a price target of $40 per share. This suggests a potential upside of 35% over the next 12 months.
Goldman is optimistic about Domino's renewed focus on store unit economics and its reinvestment strategy to ignite growth.
The broker believes Domino's earnings likely bottomed out in FY24 and sees a path to improvement in FY25.
We saw the beginning of rapid store closures in both Japan and France as a positive sign to restore network quality and profitability. Net net, we forecast <1% total store growth in FY25 while network
sales/store +2%.
Consensus also rates the ASX share a buy, according to CommSec.
Telstra back in favour
Telstra also finished lower on Wednesday, around 2% in the red at $3.90 per share. Zooming out, it has underperformed over the past year, lagging 15% behind the S&P/ASX 200 Index (ASX: XJO).
However, Goldman also sees this as a prime buying opportunity, thinking Telstra is set for a comeback.
Telstra's "low-risk earnings and dividend growth", make it an attractive option during uncertain times, the broker says.
Though the ASX share might seem fully valued at first glance, Goldman argues it is more compelling when you factor in NBN recurring payments.
Goldman has a buy rating on Telstra with a $4.35 price target, indicating an 11.5% upside at the time of writing.
Morgan Stanley also backs Telstra, retaining an overweight rating with a price target of $4.40 on the stock.
According to my colleague James, the firm praised Telstra's full-year results and noted that the company could benefit from future interest rate cuts, which would reduce its debt costs.
Telstra is also rated as a buy according to consensus, per CommSec.
ASX shares takeout
Experts say these ASX shares are well-positioned to help lead the next market rally. Domino's is down 44% in the last year, whereas Telstra has slipped 3%.
