Recent market volatility means that there are a number of ASX 200 shares that are trading at a deep discount to what analysts believe they are worth.
Two such examples are named below. Here's what analysts are recommending this month:
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Catapult Sports Ltd (ASX: CAT)
Bell Potter thinks that this wearables and sports analytics company's shares could have major upside for investors over the next 12 months.
Last week, the broker retained its buy rating on the ASX 200 share with a reduced price target of $5.50. Based on the current Catapult Sports share price of $3.32, this suggests potential upside of 65% is possible between now and this time next year.
Bell Potter concedes that there is a chance that Catapult won't be an ASX 200 share for much longer. However, it continues to believe that it is one of only a handful of quality ASX tech stocks in the mid cap space. The broker explains:
Catapult has a March year end so will not report its next result till May and we do not expect much if any news flow between now and then. There is some potential for Catapult to be removed from the S&P/ASX 200 Index at the next rebalance in March – given the recent price fall and despite the equity raising in November – after only being included in September last year.
This potential removal has perhaps also contributed to the fall in the share price. In its favour, however, Catapult is still one of the few good quality tech stocks in the mid cap space – even if it gets removed from the 200 but stays in the 300 – and so any rebound in the sector will likely see Catapult move in tandem.
James Hardie Industries plc (ASX: JHX)
The team at Morgans thinks that this building materials company's shares are undervalued at current levels.
The broker recently put a buy rating and $45.75 price target on the ASX 200 share. Based on its current share price of $36.54, this implies potential upside of 25% for investors over the next 12 months.
Morgans was pleased with the company's third-quarter update and believes the tide could be turning in the key US market. It explains:
JHX delivered a clean Q3 beat with sequential margin improvement, disciplined execution on AZEK integration, and early evidence that volumes in core Siding & Trim (S&T) are stabilising at low levels. While NPAT remains temporarily weighed by amortisation and higher interest, the underlying margin trajectory and synergy capture both point to improving earnings quality into FY27.
With US housing likely near the trough, we see medium-term upside as organic growth returns, synergies compound, and leverage falls toward <2.0x by 3Q28. We retain our BUY rating and lift our valuation to A$45.75/sh.
