'Our choice': 2 ASX 200 stocks to jump on before catalysts kick in

These two shares could end up bargains, according to one expert who reckons the market hasn't quite caught up with what's going on.

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Representing the largest companies in the nation, you would think there would be no surprises with any stocks within the S&P/ASX 200 Index (ASX: XJO).

However, sometimes professional investors can pick up on longer-term potential that the market has yet to wake up to.

And that presents a terrific window to buy those ASX 200 stocks for cheap before everyone else cottons on.

Here are two such examples:

'A catalyst for further gains'

Although the Lynas Rare Earths Ltd (ASX: LYC) share price is almost 20% lower now than it was a year ago, it has recently gained some positive momentum.

The stock has rocketed 11.9% over the past four weeks.

"The rare earths miner enjoyed a significant share price rise in October after its Malaysian operating licence was extended until March 2026," Marcus Today analyst Oliver Matthew told The Bull.

"Lynas Rare Earths has signed a follow-on contract with the US Department of Defence for the construction of a heavy rare earths component at the Lynas facility in Texas, as the US seeks more domestic rare earths processing."

Matthew has almost unanimous support among his peers on his bullishness.

According to CMC Markets, a stunning 11 out of 12 analysts now believe Lynas shares are a buy.

The commodity market is looking favourable too, noted Matthew.

"Rare earths prices have also risen since the lows in July. We believe the latest developments provide a catalyst for further gains."

This ASX 200 stock is still below long-term average

No company wants to be seen dancing on a competitor's grave, but Telstra Group Ltd (ASX: TLS) has definitely been a beneficiary of recent events at its closest rival.

"This telecommunications giant is attracting new customers following the Optus network crash," said Matthew.

"The company has guided underlying EBITDA to range between $8.2 billion and $8.4 billion in fiscal year 2024. Underlying EBITDA was $8 billion in fiscal year 2023."

He added that the telco's T25 corporate reform strategy is "on track".

Telstra also seems to be something of a "no brainer" pick among the professional community. A remarkable 15 out of 16 analysts currently surveyed on CMC Markets rate the stock as a buy.

The share price is still cheap enough to buy right now, reckons Matthew.

"Despite recent gains following the Optus crash, the share price is still below its long-term trading range average and remains our choice in the telecommunications sector."

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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