Bell Potter names the best ASX industrials shares to buy in FY25 (for big returns)

The industrials sector may not be the most exciting side of the market to invest.

But that doesn’t mean there aren’t exciting returns on offer from ASX industrials shares.

For example, the two ASX shares listed below have been named as buys by analysts at Bell Potter and tipped to rising strongly from current levels. They are as follows:

Cleanaway Waste Management Ltd (ASX: CWY)

The first ASX industrials share that has been given the thumbs up is Cleanaway Waste Management. As its name implies, it is one of Australia’s leading waste management companies with a footprint of over 330 sites, 6,100 trucks, and 7,500 employees.

Bell Potter is feeling positive about the company’s outlook and appears optimistic it can achieve its Mission 500 EBIT goals. It explains:

We think visibility on CWY’s Mission 500 EBIT target by FY26e has recently lifted, with management having secured work in new end markets (e.g. Vic CDS, O&G, FOGO), shown early Operational Excellence delivery in NSW Solids, and proven a focus on pricing and mix discipline in landfills. At the time of writing, CWY’s trading discount (EV/EBITDA) to its US peer group has also recently opened to more than a standard deviation below the 5-year average at ~30% (vs. 22% 5-yr average) and as such we believe screens relative value at current levels.

The broker currently has a buy rating and $3.15 price target on its shares. This implies potential upside of 16% for investors.

IPD Group Ltd (ASX: IPG)

Another ASX industrials share that could be a buy is IPD Group. It is a distributor of electrical equipment and industrial digital technologies.

Bell Potter believes the company is well-positioned to benefit greatly from the electrification megatrend. It explains:

Electrification continues to present as a dominant market narrative and IPD Group is strongly leveraged to this growth trend through its supply of ‘low voltage’ electrical equipment that reduces the energy use of buildings and infrastructure. Pleasingly, the bulk of IPD’s earnings growth continues to be driven organically and, notwithstanding some softness emerging in commercial construction end markets, we think that FY25 is shaping up to be another year of outperformance for the group. Favorable considerations should include continued ABB market share wins, a strong project pipeline for CMI Operations, a growing presence in data centers, and an Australian EV charging market that looks to us like it is on the precipice of finally breaking through. IPD trades on a below peer average FY25e EV/EBITDA of ~9x with, in our view, a superior growth profile.

It has a buy rating and $5.60 price target on its shares. This suggests that upside of 15% is possible over the next 12 months.

The post Bell Potter names the best ASX industrials shares to buy in FY25 (for big returns) 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 positions in and has recommended Ipd Group. The Motley Fool Australia has positions in and has recommended Ipd Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.