This ASX 300 stock could deliver a 25% return

Now could be a good time to invest in the ASX 300 stock in this article.

That’s the view of analysts at Bell Potter, who are tipping market-beating returns over the next 12 months.

Which ASX 300 stock?

The stock that Bell Potter is recommending to clients is Propel Funeral Partners Ltd (ASX: PFP).

It is the second largest provider of funeral, cemetery, crematoria, and related services in the ANZ market.

Bell Potter notes that the company has a strong presence in regional areas and an emerging metropolitan presence.

While the ASX 300 stock underperformed expectations during the first half, the broker believes that better times are coming, especially given the weaker comparable period it is about to cycle. It explains:

PFP’s recent 1H26 result from saw revenue led misses given the weaker than expected average revenue per funeral (ARPF) vs market expectations and BPe. However good cost control saw broadly similar EBITDA margins vs pcp. While no guidance was provided for FY26, a -3% in comparable volumes in the pcp (2H25) including a material contraction in 3Q26 and upcoming favourable demographics arising from the ageing of the baby boomer population were reiterated as catalysts for 2H26 and ahead.

The M&A pipeline was noted as conducive, in addition to PFP’s ~10% collective ANZ market share, while the funding facility of $275m was refinanced ahead of expiry on more attractive terms (maturity in Oct-29).

Should you invest?

According to the note, Bell Potter sees plenty of value on offer here despite trimming its valuation.

This morning, the broker has retained its buy rating on the ASX 300 stock with a lowered price target of $5.00 (from $5.90).

Based on its current share price of $4.14, this implies potential upside of 21% for investors over the next 12 months.

In addition, Bell Potter is expecting an attractive 3.4% fully franked dividend yield over the 12 months, which boosts the total potential return to almost 25%.

Commenting on its buy recommendation, the broker said:

Our Price Target decreases ~15% to $5.00/share given our earnings changes and as we factor in a higher risk-free rate within our DCF valuation. With ~$135m debt capacity together with long maturity, we expect M&A activity to be supported by a healthy pipeline. As a less discretionary exposure within our Consumer Discretionary sector coverage, we remain optimistic on both PFP’s underlying business & acquisition opportunity and see M&A as driving overall revenue growth above midsingle digit organic revenue growth.

Within the underlying business, we see relatively less challenging comps in 2H26 as PFP cycles organic volume declines (particularly in Feb-Apr), while we expect the demographic tailwinds from an ageing baby boomer population to be a sizable catalyst from 2026 onwards. We see the trading update in May as a potential catalyst. We also view the freehold property portfolio valued at cost less depreciation of ~$246m as a strong hedge to the net gearing level of 2.3x.

The post This ASX 300 stock could deliver a 25% return appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro 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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.