ASX shares have slid lower this week as investors digest the latest interest rate hike and inflation data remains stubbornly high.
But, while the outlook looks bleak for some S&P/ASX 200 Index (ASX: XKO) shares, there are some which are tipped to drag the index higher over the next 12 months.
Here are three of them.
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Life360 Inc (ASX: 360)
Life360 has tumbled lower over the past week after persistent inflation and September's interest rate increase dragged down growth shares like Life360.
At the same time, investors may still be digesting the company's second-quarter FY26 update released last month. Life360 announced a 38% increase in revenue and a 53% hike in EBITDA. It also said it expects FY26 revenue growth to accelerate from 33% to 40% year-on-year.
But it wasn't enough to impress investors, who may have expected another upward revision in full-year guidance.
The latest slump also follows multiple headwinds over the past year, including a tech-sector-wide sell off, loss in confidence for AI-related stocks and a general investor rotation away from growth shares.
But it looks like the shares are finally considered to be trading below fair value. Market Index shows that all brokers have a strong buy rating on the ASX shares. The $31.72 target price implies a potential 67% upside at the time of writing.
A2 Milk Company Ltd (ASX: A2M)
A2 Milk shares have been relatively resilient over the past week after investors flocked to defensive assets like ASX consumer staple stocks, ahead of the Reserve Bank announcement on Tuesday. Shares like A2 Milk are considered defensive because their products aren't discretionary.
It's good news for the company after it suffered a difficult start to the year. The shares crashed to a multi-year low in June but rebounded quickly and have stayed relatively stable since. However, the share price still has a long way to go to recover to 2025 levels.
The company's FY26 results last month weren't as bad as many were expecting. It reported a 12.4% increase in revenue but a 2.5% decline in full-year statutory EBITDA and a 5.8% drop in statutory NPAT. The announcement didn't have much impact on A2 Milk's shares.
The shares still look well below fair value, though. Market Index data shows most brokers rate the shares a buy. The $8.04 average target price implies a potential 21% upside at the time of writing.
Aussie Broadband Ltd (ASX: ABB)
Aussie Broadband shares are around flat for the week so far, again likely supported by the company's defensive qualities at a time when investors are flocking to less risk-averse assets.
The ASX telecommunications and internet retail service provider's shares crashed in August after it posted its FY26 results. The company posted a 19.6% increase in underlying EBITDA and a 9.2% increase in revenue. But investors quickly sold off, possibly due to concerns about the company's momentum and outlook.
The shares dropped to an annual low in mid-September but have since rebounded around 6%.
It looks like they could keep climbing higher. Market Index data shows all brokers rate the telco's shares a strong buy. The $5.73 average target price implies a potential upside of around 36% at the time of writing.
