With markets trading near to recent highs, it is getting harder to find ASX stocks that offer compelling value.
But a few top stocks still appear to be trading at a significant discount to their intrinsic value and could offer meaningful upside over the next 12 months.
For example, the three ASX stocks listed below could be undervalued according to analysts. Let's see what they are recommending:
Accent Group Ltd (ASX: AX1)
Accent Group is the retail group behind brands like Hype DC, Platypus, and The Athlete's Foot. It has seen its share price fall sharply over the past year after its performance fell well short of expectations due to weak consumer spending.
However, Bell Potter believes the market is too pessimistic about its outlook and remains bullish. It said: "While some ongoing weakness in highly discretionary categories similar to AX1's non-sport segments remain, we expect monetary policy catalyst led recovery into the back-end of CY25 to support FY26e performance in the name."
Bell Potter expects Accent to deliver earnings per share of 9.9 cents in FY 2025 and then 12.8 cents in FY 2026. This means its shares are trading at a lowly 10.5x forward earnings.
Bell Potter has a buy rating and a $2.10 price target, which implies potential upside of 55% for investors.
Pilbara Minerals Ltd (ASX: PLS)
Lithium stocks have fallen sharply over the past 12 months, and Pilbara Minerals is no exception. Its shares are down more than 60% since this time last year.
But while lithium prices remain volatile, Pilbara Minerals owns one of the largest, lowest-cost hard rock lithium operations in the world. This means that its operation can still be profitable even in the current environment.
And with the long-term demand outlook for battery metals still intact — particularly from EVs and energy storage — Macquarie believes Pilbara Minerals shares offer a compelling risk-reward. The broker has an outperform rating and a $2.40 price target on them. This is almost double its current share price of $1.23.
Treasury Wine Estates Ltd (ASX: TWE)
Finally, Treasury Wine could be a cheap ASX stoc to buy. It is the wine company behind Penfolds, 19 Crimes, and many other brands.
Its shares have fallen heavily this year due to softness in the U.S. wine market and forced changes to its distribution strategy. But behind the noise, the business is making progress. Its luxury wine portfolio continues to perform well, and analysts expect growth to resume as the U.S. transition stabilises and demand in Asia picks up.
Morgans thinks its shares are too cheap to ignore. The broker recently stated that "TWE's trading multiples look far too cheap (FY25 PE of only 14.2x) and we maintain a BUY rating."
The broker has a buy rating and $11.06 price target on its shares. Based on its current share price of $8.21, this implies potential upside of 35% for investors.
