Over the long term, the share market has delivered investors a return of around 10% per annum.
While this is a great return, you don't necessarily have to settle for that. Not when there are shares out there that could be market-beaters.
For example, the three ASX shares listed below have been named as buys and tipped to rise between 25% and 30% from current levels.
Here's what you need to know about them:
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Endeavour Group Ltd (ASX: EDV)
Goldman Sachs thinks that this drinks giant is undervalued by the market at present.
The broker recently highlighted that the BWS and Dan Murphy's owner is one of the most attractively priced stocks in the consumer sector. It said:
EDV is currently trading at FY25 P/E of 18x vs FY24-27e EPS CAGR of 6%, while the implied EV/EBIT on Hotels is 3.6x (assuming Retail EV/EBIT of 15x), attractive amongst our Consumer coverage.
Goldman has a buy rating and $6.20 price target on its shares. This implies potential upside of 31% for investors from current levels.
In addition, a dividend yield of 4.5% is expected by the broker. This boosts the potential total return beyond 35%.
Johns Lyng Group Ltd (ASX: JLG)
Over at Morgans, its analysts think that this insurance building and restoration services company's shares are undervalued right now.
This is especially the case given the recent announcement of a new acquisition, which the broker is positive on. It said:
We see Keystone as highly complementary to JLG's existing IB&RS business, which provides further scale to the group's domestic operations (particularly within QLD) as well as increased exposure to commercial and large loss claims work. Incorporating Keystone into our forecasts see our EBITDA upgraded by ~7% in FY25-27F, while increased level of debt to fund Keystone (and SSKB & Chill-rite), sees our EPS forecasts increase ~4%.
Morgans has an add rating and $5.10 price target on the ASX share. This suggests that its shares could rise 25% over the next 12 months.
Xero Ltd (ASX: XRO)
Finally, Goldman Sachs is also bullish on Xero shares and believes they could deliver big returns for investors.
Its analysts are positive on the ASX share due to its huge long-term growth opportunity. They explain:
We see Xero as very well-placed to take advantage of the digitisation of SMBs globally, driven by compelling efficiency benefits and regulatory tailwinds, with >100mn SMBs worldwide representing a >NZ$100bn TAM. Given the company's pivot to profitable growth and corresponding faster earnings ramp, we see an attractive entry point into a global growth story with Xero our preferred large-cap technology name in ANZ – the stock is Buy rated.
Goldman has a buy rating and $201.00 price target on the company's shares. This implies potential upside of 28% for investors.
