Is the Temple & Webster (ASX:TPW) share price a bargain buy?

The Temple & Webster Group Ltd (ASX:TPW) share price has fallen 30% from its high. Is this a buying opportunity for investors?

| More on:
wondering about asx shares represented by woman surrounded by question marks

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Temple & Webster Group Ltd (ASX: TPW) share price has been a poor performer in recent months and particularly last week.

During the five days, the online furniture and homewares retailer's shares tumbled 12%.

And while the Temple & Webster share price is pushing higher today, it is still down 31% from its 52-week high.

Why did the Temple & Webster share price crash lower?

Investors were selling the company's shares last week after the release of its third quarter update

Although Temple & Webster is still performing positively and growing its sales strongly, it warned that it would now be focusing on growing its market share at the expense of margins.

This includes increasing its marketing spend to build strong brand awareness and achieve a national brand status and using "tactical" pricing and promotions to increase conversion.

Temple & Webster's CEO & Co-Founder, Mark Coulter, explained: "You only need to look at the US to see how the e-commerce market is playing out, and why we remain bullish about the shift from offline to online. We are at the start of this once in a generation shift, and now is the time to put our foot down to secure market leadership and ensure we are the brand for the next generation of furniture shopper."

Is this a buying opportunity for investors?

According to a note out of Bell Potter, its analysts have retained their hold rating and put an $11.30 price target on its shares.

Based on the latest Temple & Webster share price, this implies potential upside of 16.5%. So while the broker only rates its shares as a hold, the returns on offer are still above-average.

Elsewhere, analysts at Morgan Stanley are a lot more positive on the Temple & Webster share price.

According to a note from last week, the broker has retained its overweight rating and lifted its price target to $15.00. Morgan Stanley believes its reinvestment plan makes strategic sense and expects it to widen its moat.

Its price target implies potential upside of greater than 50% over the next 12 months.

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Temple & Webster Group Ltd. The Motley Fool Australia has recommended Temple & Webster Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Broker Notes

gaming asx share price rise represented by slot machine paying jackpot
Broker Notes

What does Macquarie expect from Aristocrat Leisure shares when it reports on 14 May?

Here's what the broker is expecting from this gaming technology company next week.

Read more »

Broker written in white with a man drawing a yellow underline.
Broker Notes

Top brokers name 3 ASX shares to buy today

Here's what brokers are recommending as buys this week.

Read more »

A man holding a cup of coffee puts his thumb up and smiles while at laptop.
Broker Notes

Goldman Sachs says these ASX 200 stocks are strong buys

The broker is feeling very bullish about these stocks. But why?

Read more »

A bland looking man in a brown suit opens his jacket to reveal a red and gold superhero dollar symbol on his chest.
Broker Notes

Bell Potter names more of the best ASX 200 stocks to buy in May

These stocks could be best buys this month according to the broker.

Read more »

A financial expert or broker looks worried as he checks out a graph showing market volatility.
Broker Notes

Leading brokers name 3 ASX shares to buy today

Here's why brokers believe that now could be the time to snap up these shares.

Read more »

Man looking upwards contemplating which shares to buy
Broker Notes

CSL shares have climbed 10% since 11 April. Is it too late to buy?

What are analysts saying about this biotech giant after its recent rally? Let's find out.

Read more »

Excited couple celebrating success while looking at smartphone.
Broker Notes

Bell Potter names the best ASX 200 stocks to buy in May

The broker is feeling bullish on these names this month. Let's find out why.

Read more »

Red buy button on an apple keyboard with a finger on it representing asx tech shares to buy today
Broker Notes

Top brokers name 3 ASX shares to buy next week

Brokers gave buy ratings to these ASX shares last week. Why are they bullish?

Read more »