These value stocks could rise 21% to 32%

I’m on the lookout for value stocks that could provide meaty returns. I’m using analysts’ forecasts as a guide to where I should focus my search.

Of course, broker forecasts must be taken with a pinch of salt. And I’d always suggest investors do their own in-depth research when looking at a stock.

That said, here are two that have been tipped to rise 21% to 32% over the next 12 months.

JD Sports

Let’s start with JD Sports Fashion (LSE: JD), a stock I’ve been watching for a while. Its share price has been falling, down 24.1% year to date and 17.4% over the last 12 months. As I write, it sits at 122.2p.

The 14 analysts offering a 12-month target price for the stock have an average price of 161.5p. That’s a 32.3% premium from where it’s at now.

I want to look at what could drive its share price higher over the next year. We’ll start with its valuation. As seen below, the stock currently trades on a price-to-earnings (P/E) ratio of 11.7. That’s roughly in line with the FTSE 100 average.

However, it’s significantly lower than its historical average of 23. On top of that, its forward P/E’s just 7.5. That signals there may be good value in its current price.

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I see a few risks with JD. It has issued multiple profit warnings over the last year, which have seen its share price pulled back sharply. Trading conditions have been tough. This will likely continue in the coming months.

But in its latest update, CEO Regis Schultz said the business is on track to deliver its full-year guidance. Should it achieve this, its share price could be given some much-needed momentum.

The business continues to build for the long term, which I like to see. This includes its M&A strategy to “simplify and strengthen”.

Legal & General

I’m also keeping a close eye on Legal & General (LSE: LGEN). Its share price is down 12.8% year to date and 5.3% over the last 12 months. Today, it sits at 216.8p.

But brokers think that leaves plenty of room for growth. The 16 analysts offering a 12-month target price have an average price of 264.4p. That’s 21.7% higher than where the stock is right now.

Legal & General trades on a P/E of 31.2, which looks a tad expensive. However, its forward P/E, as the chart shows below, is just 11.8. I think that looks like great value for a company of Legal & General’s quality.

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Aside from that, there’s also another massive draw with the financial services giant. It has a whopping dividend yield of 9.4%.

The firm’s raised its payout nearly every year since the 2008 financial crisis. Dividends are never guaranteed, so I like a stock with a good track record.

In the years ahead it has laid out plans for restructuring. While that’s exciting, it inherently carries risk. The current economic environment also poses a threat. The ongoing uncertainty could impact its assets under management.

But I reckon its current price is cheap. The firm’s also in a good place to benefit from trends in the years and decades ahead, such as a rise in the ageing population.