The Temple & Webster Group Ltd (ASX: TPW) share price has been on form again on Thursday.
In morning trade the online furniture and homewares retailer's shares stormed almost 5% higher to a record high of $10.35.
Why did the Temple & Webster share price storm higher?
As well as getting a lift this week from news that fellow online retailer Kogan.com Ltd (ASX: KGN) continued its meteoric sales growth in August, Temple & Webster's shares were given a boost today from a broker note out of Goldman Sachs.
According to the note, the broker has retained its buy rating and lifted its price target to $11.50 from $9.70.
This price target implies potential upside of over 16% from its last close price.
Why is Goldman Sachs bullish on the company?
Goldman Sachs has been looking at the ecommerce market and believes both Temple & Webster and Redbubble Ltd (ASX: RBL) are well-positioned for growth in the coming years.
Its analysts commented that both companies: "have some similar characteristics: strong market positions in their respective verticals, negative working capital beneficiaries, limited (TPW) to no (RBL) inventory risk, well-established supply and logistic networks accommodate the recent rapid acceleration in online commerce and large potential addressable markets."
The broker believes that both companies will benefit for three key reasons.
It explained: "We believe both business will continue to benefit from structural tailwinds: (1) migration to online commerce, a trend we believe will continue unabated even as economies return to "normal" post-Covid, (2) strong market positions in their categories based on a multi-year lead they have against competitors that should be sustained provided they keep reinvesting in their business, and (3) growth to be materially greater than Australia GDP over our forecast period which should provide ongoing operating leverage."
"These underpin the retention of our Buy rating on both stocks, noting we believe the potential long-term upside for RBL could be substantially greater if its execution becomes more consistent," it concluded.
Goldman Sachs has a buy rating and $5.20 price target on Redbubble's shares.
