If you are looking for big returns for your portfolio in 2026, then it could be worth considering the ASX 200 stock in this article.
That's because analysts at Bell Potter believe it could be dirt cheap at current levels.
Which ASX 200 stock?
The stock that Bell Potter is urging investors to buy is Premier Investments Ltd (ASX: PMV).
It is the conglomerate behind the Smiggle and Peter Alexander brands, as well as investments in property and appliance manufacturer Breville Group Ltd (ASX: BRG).
Bell Potter notes that the company recently released its guidance for the first half of FY 2026. It acknowledges that it has fallen short of expectations due to the underperformance of the Smiggle brand. It said:
Premier Investments (PMV) provided 1H26 guidance of $120m in Pre-AASB 16 EBIT for Premier Retail at the Dec AGM, implying a ~10% miss to Consensus. The continuing overall underperformance has been driven by the Smiggle brand and in particular the UK business which sees weaker growth in both store network and comps (vs last reported of -4% in Sep), while the Peter Alexander (PA) brand remains healthy to see consistent growth. PMV also announced interim leadership appointments in Smiggle and an on-market buyback of up to $100m over the next 12 months.
Smiggle to shrink further
While this has led to a downgrade to its earnings estimates, Bell Potter remains positive on the ASX 200 stock despite expecting Smiggle to shrink in size. This is because it feels that its current valuation factors this in and more. It said:
We see the Smiggle business (~30% of Retail) shrinking further especially in the largest region, UK (35-40% of the brand, as per BPe) and also seeing pressures with the rate cut cycle in the core region, Australia. The operating deleverage in the brand continues to dilute the overall group (BPe EBIT margins ~10% in FY26e vs prev. 17%), offsetting strengths from PA (~70% of Retail). We see limited catalysts for Smiggle, apart from the interim management change and lower our assumptions.
However, our views remain unchanged that the current share price implies minimum levels of earnings assumed in the Smiggle brand and any improvements from a lower base case should see some risk-reward for current conditions. Our sum of the part valuation sees a $2.0b EV for the PA brand (derived on FY26e $160m EBIT at 13x multiple, which includes $103m EBIT for 1H26e).
Time to buy
Despite the doom and gloom around the Smiggle brand, Bell Potter is recommending this ASX 200 stock as a buy with a reduced price target of $20.00 (from $26.50).
Based on its current share price of $13.39, this implies potential upside of almost 50% for investors over the next 12 months.
In addition, it is expecting dividend yields of 5.5% in FY 2026 and 6.5% in FY 2027. This brings the total potential 12-month return to approximately 55%.
