Looking for ASX 200 growth shares to buy? If you are, then check out the two listed below that analysts are bullish on and expect to deliver strong returns.
Here's what analysts are saying about these stocks:
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IDP Education Ltd (ASX: IEL)
This struggling student placement and language testing company could be an ASX 200 growth share to buy according to analysts at Morgans.
Although FY 2025 is likely to be a tricky year for the company, the broker believes it will be onwards and upwards from FY 2026. It recently said:
IEL reported FY24 underlying NPATA of A$154.3m, down 1% on the pcp. 2H24 reflected the impact of policy changes, with 2H NPATA down ~34% on pcp. Tighter and uncertain policy settings saw 2H24 IELTs volumes down ~24% HOH. Student Placement was solid (2H flat on pcp), although policy hadn't fully impacted. IEL expects the international student market (new admissions) to be down ~20-25% in FY25. IEL expect to outperform this via meaningful market share gains. We think FY25 is likely to be the trough year for 'student flows', impacted by tighter policies and the associated uncertainty. We expect IEL's earnings to fall ~12%, with some benefits from pricing; market share gains; and solid cost control.
Morgans has an add rating and $18.20 price target on its shares. This implies potential upside of 13% for investors over the next 12 months.
Xero Ltd (ASX: XRO)
Analysts at Goldman Sachs think very highly about this cloud accounting platform provider. So much so, the broker has the ASX 200 growth share on its coveted Asia-Pacific conviction list.
The broker highlights that with 4.16 million subscribers, Xero is only scratching the surface of its incredibly large total addressable market (TAM). Combined with its shift to profitable growth, this bodes well for its earnings over the next decade. It said:
We see Xero as very well-placed to take advantage of the digitisation of SMBs globally, driven by compelling efficiency benefits and regulatory tailwinds, with >100mn SMBs worldwide representing a >NZ$100bn TAM. Given the company's pivot to profitable growth and corresponding faster earnings ramp, we see an attractive entry point into a global growth story with Xero our preferred large-cap technology name in ANZ – the stock is Buy rated.
Goldman has a buy rating and $180.00 price target on its shares. Based on its current share price of $143.82, this implies potential upside of 25% for investors over the next 12 months.
