If you have space in your portfolio for some new additions, then it could pay to listen to what Ord Minnett is saying about two ASX 200 shares.
Here's why it thinks they are in the buy zone right now:
AGL Energy Limited (ASX: AGL)
Ord Minnett thinks this energy giant is being undervalued by the market and has put a buy rating and $13.00 price target on its shares. This implies potential upside of almost 40% for investors from current levels.
The broker notes that there is a lot to like about AGL at the moment, which it feels is being overlooked by investors. It said:
The company has demonstrated solid momentum over recent times with the Tilt renewable asset sale, flexible capacity development at Bayswater, progress in its Western Australia operations and a series of power purchase agreements (PPAs), and we see further drivers to come from revaluation of its 20% stake in energy management platform Kaluza, a closure of Energy Australia's Yallourn power station that will push Victorian wholesale prices, and thus AGL earnings, higher, and repricing of Tomago supply contracts.
Post the investor day, we have raised our FY26 EPS estimates by 6.1% to incorporate wider electricity margins partially offset by higher growth capital expenditure, while our forecasts for FY27 and FY28 are trimmed 0.5% and 0.2%, respectively. Our target price on AGL has been upgraded to $13.00 from $12.00, and we reiterate our Buy recommendation.
Nextdc Ltd (ASX: NXT)
Another ASX 200 share that Ord Minnett is recommending to clients this month is data centre operator NextDC. It currently has a buy rating and $20.50 price target on its shares, which offers significant upside of over 65% for investors over the next 12 months.
The broker has been pleased with recent contract wins and feels that it demonstrates that demand for data centre capacity remains strong. It said:
Ord Minnett notes NextDC had only guided to 50–100MW of contract wins for FY26, so the latest announcement, along with industry feedback highlighting strong demand from both western and eastern hyperscalers, bodes well for the full-year outcome.
We have raised our target price on NextDC to $20.50 from $19.00 to incorporate our assumed value of the agreement with Open AI, although we have not yet changed our earnings estimates due to the lack of detail and operational timelines. We reiterate our Buy recommendation.
