Are you hunting big returns? If you are, then it could be worth considering the ASX share in this article.
That's because if Bell Potter is on the money with its recommendation, it could rise by 180% over the next 12 months.
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Which ASX share?
The share that Bell Potter is recommending to clients is Trajan Group Holdings Ltd (ASX: TRJ).
It is a developer and manufacturer of analytical science instruments, devices, and solutions, with a focus on accessing specialist skills and capabilities that improve the analytical workflow of the global life sciences industry.
Bell Potter notes that the ASX share has released a trading update this month, which reveals that earnings are forecast to be lower than originally expected due to currency headwinds. It said:
Due to the strengthening AUD against the USD (c.7%) and EUR (c.8%) since 1H26, TRJ has advised that revenue and nEBITDA are likely to be impacted by c.$4m and c.$2m respectively. Operating conditions seem to be tracking in line with expectations set out at 1H26 result, but translation effects are likely to impact the FY26 result.
The vast majority of TRJ's sales are generated outside Australia, but COGS are c.50% domiciled outside Australia, which means there is not a natural hedge in TRJ's operational structure. This gap has been narrowing over several years, but translation effects can still be material to earnings.
It also notes that cost saving initiatives are in progress, including a reduction in its headcount, and a new enterprise resource planning (ERP) platform is being implemented. It adds:
TRJ noted headcount reductions are in progress, achieving c.$0.8m in cost savings in 2H26. Rationalisation of the global footprint is also in progress, particularly in reducing ongoing facility costs in the Connecticut operation. A new ERP program is being implemented in 2H26 to aid in supply chain management and improve efficiency. In this transition phase there is a risk that the timing of CE shipments could be impacted that could affect revenue recognition in 2H26. This is not included in the revenue adjustment advised to the market.
Should you invest?
Despite the disappointing update, Bell Potter remains positive and sees significant value in its shares. This is even after taking an axe to its valuation.
According to the note, the broker has retained its buy rating with a reduced price target of 75 cents (from $1.05). Based on its current share price of 26.5 cents, this implies potential upside of 180% for investors over the next 12 months.
However, the broker has warned that it may take a material improvement in its margins to drive its shares meaningfully higher. It concludes:
Our Target Price has reduced by c.27%. The Target Price reflects a 50 / 50 blend of a DCF valuation and EV/EBITDA multiple. A number of downgrades to estimates over time has instigated an increase in our DCF assumptions with the WACC increased 100bp to 13.5% and the EV / EBITDA multiple reduced from 10x to 7x. We don't see a change in investor sentiment until TRJ can materially turnaround its margins.
