The market has historically delivered an average return of approximately 10% per annum. But Aussie investors don't need to settle for that!
Not when there are ASX 200 shares out there that are being tipped by brokers to rise significantly more than this over the next 12 months.
Two such shares are named below. Here's why brokers are recommending them as buys with major upside potential:
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Light & Wonder Inc (ASX: LNW)
Analysts at Bell Potter think that this beaten down ASX 200 share could deliver big returns over the next 12 months.
The broker currently has a buy rating and $176.00 price target on the gaming technology company's shares. Based on its current share price of $130.74, this implies potential upside of 35% for investors over the next 12 months.
It likes Light & Wonder due to its strong growth outlook and the potential for a sole listing on the ASX to underpin a rerating. It said:
We rate LNW a Buy over the medium to long term due to a compelling GARP profile relative to the ASX 100 and ALL (43% discount to EV / EBITA). In our view, the key catalyst in closing this discount is the ASX sole listing, which we believe will weigh positively on the stock after Dec 2025. In the short term we acknowledge risks to LNW including: A potential miss to the lower end of CY25e AEBITDA guidance of US$1,430m (BPe US$1,424m; VA US$1,432m) due to the timing of Asian game shipments; a worsening in the ALL litigation matter (less likely); and potential market disruption due to the Nasdaq delisting which may present an attractive entry point.
South32 Ltd (ASX: S32)
The team at Morgans is bullish on this diversified miner and believes recent weakness has created a buying opportunity for investors.
The broker has a buy rating and $3.55 price target on its shares. Based on its current share price of $2.66, this implies potential upside of approximately 30% for investors over the next 12 months.
While things have not been easy in recent times, Morgans thinks its shares are undervalued at current levels. It commented:
FY25 result steady, but FY26 guidance reset at Mozal (C&M risk) and Cannington (lower throughput, higher costs) clouds near-term earnings. Hermosa build year pushes group capex to US$1.4bn in FY26, keeping FCF tight despite trimmed sustaining spend. Sierra Gorda copper volumes up 20%, but limited near-term catalysts and consensus downgrades pressure weigh on sentiment. Dividend of US 2.6cps; US$144m remains in buyback program. Maintain BUY with reduced target price of A$3.55 (was A$4.10)
