If you are searching for outsized returns for your portfolio, then it could be worth considering the two ASX shares in this article.
They have just been given buy ratings by Morgans and could be destined to rise 12% or more from current levels according to the broker.
AVITA Medical Inc (ASX: AVH)
Morgans was pleased with this medical device company’s first-quarter update and believes it was a step in the right direction.
The broker appears to believe that this could be a sign that the worst is now behind the ASX share. However, it does have a few concerns over its balance sheet. It said:
AVH released its 1Q26 result which was a clear step-in the right direction with solid QoQ growth with FY26 guidance reaffirmed, but cash balance remains the key gating factor for further positivity and its biggest near-term risk.
Operationally though it appears the worst is behind them now with the cost base reset sticking and now all 7 Medicare Administrative Contractors (MACs) now publishing RECELL reimbursement rates which fully closes the structural headwind which has plagued the stock over the last 18 months. Marginally more positive, but equally happy to keep holding out until cash is addressed properly. No change to our Speculative Buy recommendation or A$1.35 DCF-based valuation.
Morgans has a speculative buy rating and $1.35 price target on its shares. Based on its current share price, this implies potential upside of 12.5% over the next 12 months.
Qualitas Ltd (ASX: QAL)
Morgans is positive on this real estate investment company and has named it as an ASX share to buy this week.
It has boosted its valuation for the company on the belief that risks are easing now. It explains:
Following QAL’s recent 3QFY26 update, the announced changes to residential real estate investment in the Federal Budget and the sale of a further interest in the comparable Metrics Credit, we have upgraded QAL to a BUY with a $3.50/sh price target.
Our valuation and recommendation change was driven almost entirely by a reduction to our discretionary valuation discount (+75 cps), reflecting our lower perceived risk as a) the company reiterates that FUM commitments continue to increase and b) FUM deployments set new records.
Morgans has a buy rating and $3.50 price target on Qualitas’ shares. Based on its current share price, this implies potential upside of just over 20% for investors between now and this time next year.
The post Morgans says these ASX shares could rise 12% to 20% appeared first on The Motley Fool Australia.
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More reading
- 3 ASX shares Morgans rates as buys this week
- Are these ASX small-cap shares a buy, hold or sell according to Bell Potter?
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 positions in and has recommended Avita Medical. The Motley Fool Australia has recommended Avita Medical. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.