Could Goodman and Paladin Energy shares rise 20% to 80%?

Are you looking for ASX shares with significant upside potential?

Analysts at Morgans have recently highlighted two companies that they believe could deliver attractive returns for investors.

Here's why the broker is feeling bullish.

Goodman Group (ASX: GMG)

According to a note out of Morgans, its analysts have upgraded this industrial property and data centre giant's shares to a buy rating with a $33.20 price target.

Based on the current Goodman share price of $27.60, its target implies potential upside of approximately 20%.

Morgans' upgrade follows Goodman's first-quarter update, which reaffirmed its FY 2027 guidance for 9% operating earnings per share growth.

The broker was encouraged by the company's $19.7 billion development pipeline, with data centres accounting for 79% of projects underway.

It also highlights Goodman's growing access to electricity, with its global power bank reaching 6.6 gigawatts. This is becoming increasingly valuable as technology companies search for suitable locations to build data centres.

And while Goodman didn't announce any new data centre leases during the quarter, Morgans isn't overly concerned. It believes this is a timing issue, noting that three projects are in advanced negotiations and market rents continue to rise.

Overall, with development activity progressing and strong demand for data centre capacity, Morgans believes the shares are undervalued.

I would have to agree with the broker on this one. I think Goodman has a very bright long-term growth outlook and appears undervalued at current levels.

Paladin Energy Ltd (ASX: PDN)

Another ASX share that Morgans is bullish on is uranium producer Paladin Energy.

This week, the broker has retained its buy rating and $13.10 price target following the company's September-quarter update.

With Paladin Energy's shares currently trading at $7.37, this implies potential upside of almost 80%.

During the quarter, Paladin Energy reported uranium production of 1 million pounds at its Langer Heinrich mine in Namibia, which was below market expectations.

This reflected a planned maintenance shutdown and weaker recovery rates caused by the characteristics of the ore being processed.

The lower production volumes and elevated costs also weighed on cash flow during the quarter. However, Morgans sees reasons to be optimistic about the longer-term outlook.

It highlights one encouraging development, which was the record realised uranium price of US$79.40 per pound achieved during the quarter.

The good news is the broker expects pricing to improve further as older sales contracts expire, allowing Paladin Energy to benefit more from stronger uranium prices.

And if the company can increase production and bring costs under control, there could be a significant improvement in its financial performance.

I think Morgans makes good points on Paladin Energy shares. However, I would prefer to wait for more consistent production before considering a position.

The post Could Goodman and Paladin Energy shares rise 20% to 80%? appeared first on The Motley Fool Australia.

Motley Fool contributor James Mickleboro has positions in Goodman Group. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goodman Group. The Motley Fool Australia has positions in and has recommended Goodman Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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