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Investing.com - Jefferies initiated coverage on Temple & Webster Group Ltd (ASX:TPW) with an underperform rating and a price target of AUD17.00 on Friday.
The research firm expressed concerns about the long-term sustainability of domestic online vertical re-sellers like Temple & Webster, despite their initial success in the market.
Jefferies noted that while online marketplaces for various sectors have reshaped their respective industries, and global giants like Amazon (NASDAQ:AMZN) and Alibaba (NYSE:BABA) dominate their spaces, the outlook remains uncertain for companies like Temple & Webster.
The firm highlighted challenges Temple & Webster faces, including brick-and-mortar retailers fighting back and increasing encroachment from global technology companies into the online furniture retail space.
Jefferies cited Temple & Webster’s current all-time high enterprise value to revenue ratio as a factor in its cautious stance on the Australian online furniture retailer.
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