ASX small-caps can be an attractive allocation option for your portfolio due to increased upside.
Their lower market valuations, earlier growth stage, and thinner analyst coverage mean successful execution or new capital flows can re-rate them much faster than large established companies.
Here are two that have received updated guidance from the team at Bell Potter.
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Accent Group Ltd (ASX: AX1)
Accent Group Limited is a footwear and sports clothing retailer and wholesaler which owns/operates a number of footwear businesses in the performance, comfort and active lifestyle sectors.
These include multi-branded retailers, The Athlete's Foot (TAF) Australia, Platypus, Hype, Sports Direct and Glue Store, as well as a number of mono-branded retail stores for Merrell, Skechers, Vans, Timberland, Stylerunner, and more.
While AX1 has a dominant market position in the overall Australian footwear market, the company also has an emerging presence in youth apparel through its Glue Store platform.
This ASX small-cap has struggled year to date, falling 42% in that span.
Bell Potter recently updated their outlook on the company following a recent trading update.
The broker noted that Accent Group revised down their FY26 EBIT guidance to $79.5-84.5m (was $85-95m).
The investor day on 13th May focused on company's Vision 2030, which should see a stronger position in the sports category from the diversification via the addition of 30 Sports Direct (SD) stores over the next 3 years and further growth in their vertical brands division led by a strong business, while maintaining lifestyle category market share (BPe market share ~30% in Australia).
The broker subsequently lowered its price target to 60 cents per share for this ASX small-cap (previously 68 cents). This is just slightly above the current share price of 55 cents.
It maintained its hold recommendation.
EBR Systems Inc (ASX: EBR)
EBR Systems develops implantable systems for wireless tissue stimulation.
Its share price has also fallen significantly in 2026, down 44% year to date.
However, Bell Potter is projecting significant growth for this ASX small-cap.
In a recent report, it said the company is trading at an attractive entry point.
It noted that In the last week, EBR has announced hospital purchase agreements with 325 hospitals and thousands of other health centres, covering a large swathe of the US.
These groups are also amongst the largest hospital groups in the US, reflecting validation of the WiSE-CRT system.The agreements pave the way for EBR sales reps to directly engage with individual physicians within these groups to generate adoption and build clinical traction.
The broker has retained its buy recommendation and $2 price target on this ASX small-cap.
From yesterday's closing price, this indicates an upside potential of 286%.
