If you are looking for some big potential returns for your investment portfolio, then it could pay to hear what Morgans is saying about the two ASX 200 shares in this article.
That's because the broker believes these shares are cheap and have the potential to rise around 50% from where they trade today.
Let's see what the broker is recommending to clients this week:
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Collins Foods Ltd (ASX: CKF)
Morgans thinks this quick service restaurant operator's shares are undervalued at current levels.
The broker has a buy rating and $12.50 price target on its shares. Based on its current share price of $8.29, this implies potential upside of 50%.
Commenting on its buy recommendation, Morgans said:
We revise our CKF forecasts ahead of the FY26 result in June, trimming underlying NPAT to reflect deferred store openings, reset German acquired store economics, and a lower EU SSS assumption to better capture the Netherlands-skewed mix for FY26, partially offset by a marginal AU SSS upgrade on sustained KFC Australia momentum. We maintain our BUY recommendation and reduce our price target to $12.50 (from $12.70).
Pro Medicus Ltd (ASX: PME)
Another ASX 200 share that Morgans is recommending to clients is health imaging technology company Pro Medicus.
After making adjustments to its financial model for Pro Medicus, the broker has retained its buy rating with a $210.00 price target. Based on its current share price of $138.73, this implies potential upside of 51% for investors between now and this time next year.
Morgans has been impressed with Pro Medicus' contract wins since the release of its half-year results in February and remains very positive on its long-term growth opportunity. It explains:
In this note, we deploy a new PME model where we have deliberately set a lower bar. Our remodelled estimates prioritise achievability over optimism, staging implementation revenue conservatively and mark FX to spot. We see this as the right framework for a stock where sentiment has been fragile. On the business operations front, the story remains untarnished.
Contract newsflow since February has been exceptional: ~$100m in wins and renewals, all at higher pricing, with cardiology upsell gaining traction. The demand story is not in question. We re-emphasise our positive long-term conviction on the name although lower our valuation to reflect current but potentially fleeting headwinds. Our target price is reduced to A$210 p/s and we retain our Buy recommendation.
