ASX shares had a big year in 2024 and now it's time to review the potential winners for the year ahead.
Brokers have rated two stocks highly, and I think they are well positioned for growth in 2025: Santos Ltd (ASX: STO) and Qantas Airways Ltd (ASX: QAN).
Let's see why the experts reckon these two ASX shares are ready to spike this year.
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ASX shares ready to rumble
First on the list is Santos. The oil and gas major had a difficult end of year in 2024.
But Santos shares have spiked more than 10% in the past month, as the price of oil rose sharply from US$68.60 per barrel to US$78.5 per barrel over that time.
Because Santos is a price taker on the 'liquid gold' (meaning it doesn't get to set the prices of the product it sells – the market does), the ASX share is sensitive to oil price fluctuations.
As to the outlook? Analysts are bullish on Santos this year.
Goldman Sachs rates Santos a buy with a $7.90 per share price target. At the time of writing, this equals a 10.5% upside potential.
It also projects an "average 5% dividend yield" from the ASX share in the coming three years, bringing the total estimated return to 15.5% this year. Still, it's important to note this is an 'average' projection over the period.
Meanwhile, according to broker data obtained from Tradingview, analysts' consensus estimates value Santos at $8.19 per share.
This equals a 14.5% upside potential from the time of writing, lifting to about 20% with that 'average' 5% yield. Based on these numbers, I think Santos is well-positioned to outperform.
Qantas ready for liftoff in 2025?
The second ASX share I think could be worth a closer look at is Qantas. I'll start by noting that Qantas shares surged more than 70% last year despite the flying kangaroo dominating headlines at various points.
After such an extensive run, you'd be forgiven for thinking the best of the airline's share price is behind it. But that's not the view from Goldman Sachs and Morgan Stanley.
Goldman also rates Qantas a buy, noting the ASX share is the "flagship carrier of Australia", making it the "largest airline…by capacity share, serving destinations domestically and internationally."
The broker forecasts that, by FY25, Qantas' capacity will return to "102%" of its level pre-COVID, before the world was turned upside down.
…we believe QAN is not priced for a generic recovery, let alone prospects for improved earnings capacity. We continue to see upside associated with substantially improved MT earnings capacity.
Analysts at Morgan Stanley also rate the ASX share a buy with a price target of $10.50. This equates to 15% upside potential at the time of writing.
As my colleague James recently reported, the broker expects lower fuel costs to boost profits. It also said travel demand "remains strong."
The broker also reckons Qantas could repurchase more shares in FY25.
Foolish takeout
According to several brokers, both of these ASX shares are set to deliver strong shareholder returns in 2025.
Time will tell what happens for each company, but I think they are well-positioned and could be worth a closer look.
