Strong, reliable Australian stocks with a long-term upside and robust tailwinds are ideal for any investor's portfolio.
After all, it's shares like this which could continue driving portfolio growth for years, or even decades, to come.
Here are my three ASX stock picks.
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REA Group Ltd (ASX: REA)
REA Group is the most dominant player in Australia's online real estate market. Its flagship platform is realestate.com.au, and it also operates a mortgage broking business and other real estate-related services. The company also holds a majority ownership in REA India.
The company has strong financials, has consistently grown its revenue, recently raised its full-year dividend, and is expected to benefit from robust and continued growth for years to come.
REA Group is also well-positioned to benefit from further RBA cash rate cut tailwinds. The RBA has already delivered three rate cuts, and as borrowing costs continue to come down (while disposable incomes go up), it'll only boost property selling and buying activity.
Morgan Stanley is bullish on the company's outlook. It has an overweight rating and a $300.00 price target on its shares. UBS currently has a buy rating on REA Group shares, with a price target of $290. At the time of writing, these target prices represent a potential 31.82% and 27.4% upside for investors.
Macquarie is more conservative and has placed neutral ratings on REA Group with a target price of $255 per share, representing a potential upside of 12%.
Xero Ltd (ASX: XRO)
New Zealand-based Xero is a leading cloud-based technology business that offers easy-to-use accounting software to business owners, accountants, and financial advisors.
The software is sticky, which means it has a very low subscriber churn rate. This makes for strong growth potential in a large and constantly expanding market. The business is incredibly profitable too, posting a significant growth surge in its FY25 results. It's easy to see why Xero is such a popular long-term growth option for investors.
According to TradingView data, 9 out of 14 analysts have a buy or strong buy rating on Xero shares with a maximum upside of $240.75 a piece. That's a potential 48.95% upside at the time of writing.
UBS is one of the brokers that like the company. It currently has a price target of $215 on Xero.
WiseTech Global Ltd (ASX: WTC)
Another Australian stock for your portfolio is WiseTech Global. WiseTech is a logistics software provider for the global freight & supply chain. The company's software solutions, including its flagship CargoWise One solution, are used by top 25 global freight forwarders, including Toll and DHL.
Like Xero, WiseTech Global has strong long-term growth potential. It has a huge global customer base, has posted a strong financial and operational performance, is heavily invested in research and development, and has been actively involved in the acquisition of businesses to scale the business.
The nature of WiseTech's software also means it has a high retention rate.
Many brokers are also bullish on the stock's long-term growth potential. Bell Potter and Morgans have buy ratings and price targets of $127.50 and $127.60, respectively. At the time of writing, that's a potential upside of just over 32%.
