Investing.com -- Argentina and Türkiye could deliver stock market returns of 20% or more in 2025 as economic reforms in both countries gain traction, according to a new report from JPMorgan.

The bank’s analysts cited a successful policy shift in both nations aimed at taming inflation and unlocking value in their undervalued equity markets.

“This is not an either/or story – both markets can potentially post 20%+ returns over ’25,” JPMorgan wrote.

They explain that Argentina, emerging from a period of hyperinflation and political change, could benefit from the lifting of capital controls, while Türkiye’s steady path toward lower inflation and interest rates is also expected to fuel gains.

Both markets trade at a steep discount compared to broader emerging markets, notes JPM.

While the MSCI Emerging Markets index trades at 12x forward price-to-earnings (P/E), Argentina is at 9x and Türkiye is even lower at 7x. “Do investors want a big discount to EM? Or a bigger discount?” JPMorgan analysts asked, emphasizing the relative value in both markets.

The bank adds that Türkiye, which accounts for 0.7% of the MSCI EM index, has a daily trading volume exceeding $4 billion, making it 12-15 times larger than Argentina’s local market, even when considering ADRs.

Despite this size difference, JPMorgan remains overweight on both countries.

Among top Argentine stock picks, JPMorgan highlighted Grupo Financiero Galicia and Vista Energy, favoring financials and energy.

In Türkiye, the bank’s preferred stocks include food retailer BIM, which has a business model similar to Mexico’s BBB, as well as Akbank (IS: AKBNK ), Turkish Airlines, and mid-cap food retailer Migros.