2 high quality ASX shares that could be buys

Looking for top ASX options? Check out these shares…

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There are a lot of high quality companies listed on the Australian share market. This can make it hard to decide which shares to buy above others.

To help narrow things down, I have picked out two ASX shares that are highly rated. Here's why they could be buys:

NEXTDC Ltd (ASX: NXT)

NEXTDC could be an ASX share to buy. It is one of the Asia-Pacific region's leading data centre operators with a growing portfolio of world class centres in key locations across Australia. Thanks to the insatiable demand for data centre capacity due to the structural shift to the cloud, NEXTDC has been growing at a strong rate for years.

Pleasingly, this trend is expected to continue and support further growth in the coming years. In addition to this, NEXTDC is now looking to boost its growth by expanding into the Asian market. If this is a success, it could provide it with a significant market opportunity.

Citi currently has a buy rating and $14.45 price target on the company's shares. This compares to the latest NEXTDC share price of $11.85. It notes that a majority of its near-term earnings are already contracted and customer expansion is underpinning its medium-term forecasts.

Temple & Webster Group Ltd (ASX: TPW)

Another ASX share to look at is Temple & Webster. It is Australia's leading online furniture and homewares retailer.  Temple & Webster has been benefiting greatly from the structural shift to online shopping. This underpinned explosive growth during the first half of FY 2021.

Pleasingly, online furniture shopping is still in its infancy compared to other categories. But this is expected to change in the future, which is why management is now aiming to cement its leadership position by investing heavily in marketing.

Credit Suisse supports this decision and currently has an outperform rating and $12.54 price target on its shares. The broker sees scope for the furniture industry to reach ~13% in online penetration by FY 2025. It believes Temple & Webster is well-placed to benefit from this.

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Motley Fool contributor James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended 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.

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