With the S&P/ASX 200 Index (ASX: XJO) recovering strongly from a selloff in April and now trading within sight of a record high, investors may be worried that the big potential returns are over.
But that's not the case according to one leading broker. That's because it believes the ASX 200 shares in this article could rise 40% to 80% from where they currently trade. Here's what you need to know:
James Hardie Industries plc (ASX: JHX)
Bell Potter has named James Hardie as an ASX 200 share to buy. It is a global building materials company specialising in the production and marketing of fibre cement and fibre gypsum building solutions.
Its analysts think that James Hardie is well-placed for growth thanks to a structural shift towards fibre cement in the United States. In addition, they see recent (significant) share price weakness following news of a major acquisition as a buying opportunity. They explain:
In our view, JHX is poised for continued earnings expansion, driven by the structural shift towards fibre cement in the US. Households in the US continue to shift to fibre cement cladding from vinyl/timber, providing a multi-year runway for JHX's revenue and profit growth. With JHX announcing its intent to purchase AZEK, the share price has fallen from ~25%. While debate still wages around the deal, we retain JHX in our focus list as we see upside from these levels.
Bell Potter currently has a buy rating and $63.00 price target on its shares. This suggests that upside of 80% is possible from current levels.
Neuren Pharmaceuticals Ltd (ASX: NEU)
The team at Bell Potter also thinks that big returns could be coming from this ASX 200 stock.
Neuren is a pharmaceuticals company developing new drug therapies to treat multiple serious neurological disorders that emerge in early childhood and have no or limited approved treatment options.
All its programs have been granted orphan drug designation in the United States, which provides incentives to encourage development of therapies for rare and serious diseases.
Bell Potter believes that its shares are very attractive at current levels. It highlights that little value is being placed on the promising NNZ-2591 therapy, which is under development. It said:
NEU's valuation continues to look attractive and ascribes very little value to NNZ-2591, which is commencing its first Phase 3 trial in the coming months but will be ~2 years until data readout. NEU has a mighty cash balance of $341m as at 31-Mar-2025, more than enough to fund several Phase 3 trials and we expect the company will be close to break even in CY25 from US royalty income alone.
Bell Potter has a buy rating and $20.00 price target on its shares. This implies potential upside of over 40% for investors.
