Can the Temple & Webster (ASX:TPW) share price hit $16?

This online retailer’s shares could be heading higher from here…

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The Temple & Webster Group Ltd (ASX: TPW) share price has been a very strong performer over the last six months.

During this time, the online furniture and homewares retailer’s shares have gained an impressive 40%.

Where next for the Temple & Webster share price?

The good news is that one leading broker believes the Temple & Webster share price can keep on rising from here.

According to a note out of Morgan Stanley, its analysts were pleased with the company’s performance in FY 2021 and also the solid start it has made to the new financial year.

In case you missed it, Temple & Webster reported an 85% increase in revenue to $326.3 million and a 141% jump in EBITDA to $20.5 million in FY 2021. It also revealed revenue growth of 49% for the period 1 July to 27 August.

Driving this growth was the accelerating shift from offline to online, a thriving housing market, strong customer growth, and an increase in revenue per active customer.

In response to this update, Morgan Stanley put an overweight rating and $16.00 price target on its shares.

Based on the current Temple & Webster share price of $12.89, this implies potential upside of 24% over the next 12 months.

Why is Morgan Stanley bullish?

Morgan Stanley is bullish on Temple & Webster due to its belief that the company’s strong revenue growth will continue.

This is due partly to the company’s reinvestment program, the structural shift online, and the launch of mobile apps.

All in all, Morgan Stanley believes Temple & Webster is on track to triple its annual revenue to $1 billion in the next four years.

In light of this, the broker sees a lot of value in its shares at the current level and is recommending them as a buy.

Should you invest $1,000 in Temple & Webster right now?

Before you consider Temple & Webster, you'll want to hear this.

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Motley Fool contributor 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 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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