ASX furniture retailers Nick Scali Ltd (ASX: NCK) and Temple & Webster Ltd (ASX: TPW) have been among the best S&P/ASX All Ords (ASX: XAO) stocks in recent times.
Over just about any time period, both companies have beaten the market.
Over the past 5 years, Nick Scali shares have soared 184%, and Temple & Webster is not far behind with a 124% rise.
In the past year, Nick Scali has risen 49%, compared to a 106% increase for Temple & Webster.
For reference, the All Ords Index is up 50% over 5 years, and 7% over the past year.
As consumer discretionary stocks, both Nick Scali and Temple & Webster are likely beneficiaries of interest rate cuts.
This suggests that, despite their record run, these two historically market-beating stocks may continue to outperform.
With further rate cuts projected, investors may be considering an investment in Nick Scali or Temple & Webster.
So, which is the better buy today?
Battle of the ASX furniture retailers
In its post-earnings season research note, Emerging Leaders Reporting season wrap & best picks, Macquarie Group Ltd (ASX: MQG) revised its price target on both companies.
Commenting on Nick Scali, Macquarie highlighted that the company had started FY26 strongly, with like-for-like written sales orders up 7.2% in July.
Macquarie also said:
ANZ sales growth expected in 1Q26e and momentum over 2H25 in ANZ (orders were -8.5% in Jan-25) demonstrates an improving consumer demand environment and still leave us incrementally positive on the NCK outlook into FY26e.
However, the broker's price target of $21.90 is above the current share price of $24.13, suggesting the company is not attractively valued at today's price.
Instead, Macquarie considers Temple & Webster to be more attractively valued given its current share price and outlook.
The broker expects sales momentum to improve in FY26, driven by a 'catalyst rich' next 12 months driven by interest rate cuts and improving consumer demand.
While Macquarie acknowledged its steep valuation, it suggested it was justified:
Whilst TPW appears expensive, even to longer-term forward-looking investors (37.2x FY28E P/E) – accelerating earnings momentum and a currently underutilised balance sheet suggest upside.
Macquarie expects Temple & Webster to deliver 28% revenue growth in FY26.
As a result, Macquarie has placed a target price of $31.30 on the ASX furniture retailer.
Given that shares closed at $24.43 on Friday, this suggests 28% upside from here.
Foolish Takeaway
Nick Scali and Temple & Webster have been among the best-performing ASX All Ords shares over just about any period. With further rate cuts projected, both companies are well-positioned to deliver strong growth. However, at today's share prices, Macquarie is projecting Temple & Webster shares to materially outperform Nick Scali over the next 12 months.
