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Investing.com - RBC Capital has upgraded Temple & Webster Group Ltd (ASX:TPW) from Sector Perform to Outperform, while lowering its price target to AUD19.00 from AUD26.00.
The Australian online furniture retailer remains committed to its FY26-FY28 revenue target of $1 billion, despite recent growth challenges that prompted the rating adjustment.
RBC Capital’s forecasts project Temple & Webster will reach approximately $977 million in revenue, slightly below the company’s target, with the analyst noting that returning to growth trajectory may come at the expense of margins.
The investment firm indicated that increased marketing expenditure to boost near-term sales aligns with existing concerns about the company’s ability to reduce marketing costs.
RBC Capital expressed confidence in Temple & Webster’s historical success in leveraging fixed costs in non-marketing areas, suggesting that marketing efficiency could improve as the company achieves greater scale.
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