Why these ASX shares could rise 20% to 30%

Analysts have good things to say about these shares. Let's find out why.

Looking for big returns? If you are, then it could be worth checking out the two ASX shares in this article.

That's because analysts have just put buy ratings on them and are expecting upside of at least 20% from current levels.

Here's what they are recommending:

a man in a business suite throws his arms open wide above his head and raises his face with his mouth open in celebration in front of a background of an illuminated board tracking stock market movements.

Image source: Getty Images

Netwealth Group Ltd (ASX: NWL)

Bell Potter thinks this ASX share could be being undervalued by the market, especially after a strong quarterly update this week.

In response to its update, the broker has retained its buy rating and $30.00 price target on Netwealth's shares. Based on its current share price of $24.43, this implies potential upside of over 20% for investors over the next 12 months.

Commenting on its recommendation, Bell Potter said:

NWL has provided an update across multiple fronts, highlights being the first material endorsement of its new private wealth and stockbroking solution, as well as long-term ambitions for the group. This includes more advanced net flow guardrails. We expect the conversation to move towards growth (and away from dissecting margins). The update sees net flows revised up, after delivering periods of $15B. We expect this will release doubts around governance, market volatility and proposed tax changes.

Our Buy rating is unchanged, and we upgrade our net flow estimates +8% FY27-29. Building in margin guidance prompts us to downgrade EPS -7%/-4% and we leave headroom on the FUA target. NWL is looking to replicate EPS growth. The mandate win is the first example of a catalyst, independent of any potential vendor attrition.

ResMed Inc. (ASX: RMD)

Morgans highlights that this sleep disorder treatment company's shares have de-rated to their lowest PE ratio since the GFC.

As a result, the broker believes a buying opportunity has opened up and has put a buy rating and $41.72 price target on its shares. Based on its current share price of $31.44, this implies potential upside of approximately 33%.

Commenting on ResMed shares and its buy thesis, Morgans said:

RMD has de-rated to ~16x forward earnings, its lowest valuation since the post-GFC period, despite consensus continuing to forecast double-digit EPS growth. GLP-1 therapies, positive Phase III data from Apnimed's oral OSA therapy, the prospect of Philips re-entering the US PAP market from 2027 and broader healthcare sector de-rating, have driven recent share price weakness.

While these risks are real, current industry data and RMD's operating performance provide limited evidence of a material deterioration in underlying demand. We make no changes to FY26-28 forecasts or our A$41.72 target price. BUY.

Motley Fool contributor James Mickleboro has positions in ResMed. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Netwealth Group and ResMed. The Motley Fool Australia has positions in and has recommended Netwealth Group and ResMed. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Broker Notes

A financial expert or broker looks worried as he checks out a graph showing market volatility.
Broker Notes

Buy, hold, sell: Cleanaway Waste Management, New Hope Corporation, CSL shares

Let's check out some new ratings on ASX shares today.

Read more »

Three different hands against a blue backdrop signal thumbs up, indicating share price rise on the ASX market
Broker Notes

3 ASX 200 shares to buy and why: Ord Minnett

The top broker explains its buy recommendations on Fortescue, ARB, and Resmed shares.

Read more »

Piggybank with an army helmet and a drone next to it, symbolising a rising DroneShield share price.
Broker Notes

How high will DroneShield shares go? A broker weighs in

While volatile, the signs are good for this company, Canaccord Genuity says.

Read more »

Woman with her hands out to each side on a light blue background.
Broker Notes

Buy, hold, sell: Ramelius Resources, Medibank, Soul Patts shares

Let's take a look at some new ratings from the experts this week.

Read more »

Two colleagues looking at a graph and comparing share prices.
Broker Notes

Guess which ASX 200 share was just hit with a broker downgrade

Bell Potter has turned lukewarm on this popular stock.

Read more »

Young successful engineer, with blueprints, notepad, and digital tablet, observing the project implementation on construction site and in mine.
Broker Notes

This ASX uranium company is set to surge: Brokers

Despite a project delay this company's shares look cheap, brokers agree.

Read more »

A woman in a red dress holding up a red graph.
Broker Notes

3 ASX shares UBS has tipped to increase 44% to 76%

Three very different companies to choose from.

Read more »

A medical specialist holds a red heart connected via technology and artificial intelligence.
Broker Notes

Morgan Stanley just upgraded their CSL share price target

The blood products company is still looking like a good buy.

Read more »