ASX shares have slumped this week as investors digest renewed conflict in the Middle East, oil prices and supply concerns, climbing inflation, and the potential for further interest rate hikes.
But here are five S&P/ASX 200 Index (ASX: XJO) shares that could turn the index around over the next 12 months. And they're all rated a strong buy by brokers, with upsides of up to 62%.
Let's take a look.
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Life360 Inc (ASX: 360)
Life360 posted a strong second-quarter FY26 update in mid-August, including a 38% increase in revenue, and a 53% increase in adjusted EBITDA. And the company expects FY26 revenue growth to accelerate 33% to 40% year on year. But investors weren't impressed, likely because they were expecting another upward revision to FY26 revenue guidance. But it looks like brokers now view the shares as below fair value. Market Index shows all brokers have a strong buy rating on the ASX shares and the $31.72 target price implies a potential 60% upside, at the time of writing.
Mesoblast Ltd (ASX: MSB)
The clinical-stage ASX biotech company has gained some attention since it posted its FY26 results last month. The company, which develops and commercialises allogeneic cellular medicines to treat complex diseases, posted a sharp increase in revenue to US$120.3 million for FY26, and a 44% reduction in net loss. And there's plenty of potential for more growth ahead. Its products, particularly Ryoncil, are gaining traction and the business is well-funded. Brokers are also bullish that sales can continue growing strongly in FY27. Market Index data shows all brokers have a strong buy rating for the ASX shares. The $3.60 target price implies a potential 62% upside, at the time of writing.
Megaport Ltd (ASX: MP1)
The ASX tech shares flew higher in late-May but slumped around 20% in August after the company posted its FY26 results. Megaport reported a 37% increase in full-year revenue, and EBITDA was up 24%. But, on the bottom line, its statutory net loss climbed to $39 million, up from $300,000 in FY25. Investors weren't impressed and many quickly sold up their shares, sending the share price tumbling. But the company is continuing to grow and it has confirmed several new contracts since late-April. Brokers are bullish that we'll see a share price correction ahead. Market Index data show that all brokers have a strong buy rating for Megaport shares. The $24.80 average target price implies a potential 39% upside, at the time of writing.
Nick Scali Ltd (ASX: NCK)
Shares of household furniture importer and retailer Nick Scali have plunged in 2026 as high interest rates and cost-of-living pressures continue to delay shoppers from buying big-ticket discretionary items like furniture. But the company's latest FY26 results announcement shows the business is still operating well with a strong gross margin improvement. Last month, Nick Scali announced a 4% increase in revenue and a 22% increase in NPAT. Many experts still view Nick Scali as a high quality retailer with growth potential ahead. Market Index data shows the majority have a strong buy rating on the ASX shares. The $18.50 average target price implies around a 28% upside ahead, at the time of writing.
Judo Capital Holdings Ltd (ASX: JDO)
Judo was one of the strongest-performing bank shares on the ASX earlier this year. But the stock crashed 43% in late-June after it downgraded its profit guidance for FY26, and it has struggled to recover. Even a stronger-than-expected FY26 result wasn't enough to reignite investor confidence. Judo's NPAT increased 29% and profit before tax increased 34%, the top end of Judo's revised guidance range. It's clear that the sell-off was way overdone and that the bank's latest results show it is growing stronger than many anticipated. Market Index data shows the majority of brokers have a strong buy rating on the shares. The $1.51 average target price implies a potential upside of around 50%, at the time of writing.
