If you have a penchant for ASX growth shares, then it could be worth checking out the two in this article.
That's because not only have they recently been named as buys, but they have been tipped to rise ~25%+ from current levels. Here's what analysts at Goldman Sachs are saying about these ASX growth shares right now:
Image source: Getty Images
Domino's Pizza Enterprises Ltd (ASX: DMP)
This pizza chain operator's shares are down heavily over the past 12 months due to a significant deterioration in its performance.
While this is disappointing, Goldman Sachs believes that its shares have now bottomed, and that it is onwards and upwards from here. It explained:
We have a Buy rating on the stock, as we believe management's focus on franchisee profitability through closure of 80/20-30 locations in Japan/France will help to material improve the quality of the network and help franchisee profitability. With COGs inflation moderating and the company focusing on execution of quality stores, we expect that store growth will be restored following a digestion period. DMP is trading at an undemanding PE valuation relative to its LT average and as such we believe the stock now offers an attractive entry point.
Goldman Sachs has a buy rating and $42.20 price target on this ASX growth share. Based on its current share price of $34.07, this implies potential upside of almost 25% for investors over the next 12 months. The broker also expects 3%+ dividend yields this year and next.
IDP Education Ltd (ASX: IEL)
Goldman Sachs also thinks that IDP Education could be an ASX growth share to buy. It is a leading language testing and student placement company.
Just like Domino's, its shares have come under significant pressure over the past 12 months. This has been driven by the loss of its language testing monopoly in Canada and regulatory changes to student visas in a number of markets. The latter is having a very negative impact on its performance at present.
However, Goldman Sachs believes that this is now understood by the market and priced into its shares. So, with the broker remaining very positive on its long term outlook, it feels that now is the time to pounce. It said:
We believe IEL's premium valuation is justified given the medium-term earnings potential driven by: (1) Structural growth in multi-destination placements, supplemented by an ongoing Australian recovery; (2) Ability to grow market share in the highly fragmented Canadian and UK SP markets; (3) Reinvestment in digital capabilities to increase competitive moat and generate new earnings streams.
Goldman has a buy rating and $21.75 price target on its shares. This suggests that upside of 55% is possible over the next 12 months.
