The Australian share market may be at a record high, but the same cannot be said for the ASX 200 shares named below.
Both of these shares are down 40%+ over the past 12 months and currently trade a long way from their 52-week highs or better.
While this is disappointing, the team at Goldman Sachs believes this weakness has created a buying opportunity for bargain hunters.
Recent notes reveal that the broker is tipping these ASX 200 shares as buys and expects them to generate very big returns for investors. Here's what you need to know:
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Domino's Pizza Enterprises Ltd (ASX: DMP)
The Domino's share price has lost approximately 40% of its value since this time last year. This has been driven by a sudden downturn in its performance after struggling with inflationary pressures.
Goldman Sachs thinks that the ASX 200 share has now bottomed and sees its recent strategy change as the reason to snap up its shares. It said:
We believe that DMP's renewed focus on store unit economics and re-investment to ignite topline growth is rightly placed. While there is still significant progress to be made, we believe that earnings has troughed in FY24 and see a path of improvement through FY25.
The broker has a buy rating and $40.00 price target on the pizza chain operator's shares. Based on its current share price of $31.93, this suggests that upside of 25% is possible for investors. It also expects an attractive 3.7% dividend yield in FY 2025.
IGO Ltd (ASX: IGO)
The IGO share price has lost a massive 60% of its value over the past 12 months. This has been driven by significant weakness in the lithium price, which is weighing heavily on the profitability of miners.
However, Goldman Sachs highlights that IGO's "Greenbushes [operation] is the lowest cost lithium asset" under its coverage and can handle low prices. Combined with its expansion potential, the broker feels this makes IGO an ASX 200 share to buy. It said:
We reiterate our belief that further Greenbushes expansion remains one of the most economically compelling brownfield lithium projects, where the JV also retains significant optionality around extending/converting the TRP, while the resource likely underpins even further expansion longer-term (i.e. CGP5, subject to market conditions).
Goldman has a buy rating and $6.35 price target on IGO's shares. Based on its current share price of $5.08, this implies potential upside of 25% for investors.
