2 stellar ASX growth shares that could be strong buys

Temple & Webster Group Ltd (ASX:TPW) and this ASX growth share could be top options for investors next week. Here's why…

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Fortunately for growth investors, the Australian share market is home to a large number of companies with the potential to grow strongly over the next decade.

Two to consider buying are listed below. Here's why they are highly rated:

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Breville Group Ltd (ASX: BRG)

This appliance manufacturer could be a good option for growth investors.

It has been growing at a quick rate in recent years thanks to its international expansion and favourable tailwinds brought about by COVID-19. These include a shift to cooking and working at home, which has led to an increase in demand for whitegoods such as cooking equipment and coffee machines.

This strong form has continued during the first half of FY 2021. In February, Breville reported a 28.8% increase in revenue to $711 million and a 29.2% increase in net profit after tax to $64.2 million.

Positively, management is confident the second half will be strong and recently upgraded its FY 2021 EBIT guidance to $136 million. This compares to its previous guidance of $128 million to $132 million and will be a 20% increase year on year.

UBS is a fan of the company and is confident in its long term growth story. This is thanks to product launches and its expansion into new markets. The broker currently has a buy rating and $35.70 price target on its shares.

Temple & Webster Group Ltd (ASX: TPW)

Another ASX growth share to consider buying is Temple & Webster. It is one of Australia's leading online retailers with a focus on furniture and homewares.

Since its launch, the company's focus has been largely on a dropship model. This is where products are sent directly to customers by suppliers, allowing for a larger product range without the need to carry inventory. However, in recent years the company has been building its own private label range.

This side of the business accounted for 25% of sales during the first half of FY 2021, but management isn't settling for that. It continues to leverage the consumer data it generates to build out its own range. This is a big positive given these products carry higher margins.

Another positive is its very strong long term growth outlook. When I spoke with CEO, Mark Coulter, in February, he was quick to point out that while the shift to online shopping during the pandemic has benefited the company, Temple & Webster was a high growth company before COVID and is expected to remain one post COVID.

Morgan Stanley certainly expects this to be the case. The broker currently has an overweight rating and $14.00 price target on its shares. It believes it can grow its sales materially over the 2020s.

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.

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