It has been a rough 2026 for ASX consumer discretionary stock Temple & Webster Group (ASX: TPW).
The company is an online-only retailer of furniture and homewares. Some of its products include office furniture, lighting, rugs, wall art, and home décor.
Since January, its share price has fallen 64%.
This includes 30% in the last month alone.
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Why are consumer discretionary shares struggling?
Rising interest rates, inflation and cost of living pressures have weighed heavily on ASX consumer discretionary shares.
The sector relies on consumers having enough disposable income to spend on non-essential items like furniture and homewares.
As borrowing costs climbed and household budgets tightened, demand weakened, putting pressure on sales growth and investor sentiment toward companies like
However a new report from Bell Potter suggests this struggling consumer discretionary stock could rebound.
The broker sees 40% upside for the company following its recent trading update.
What did the company report?
Temple & Webster provided FY26 guidance of $665-675m in revenue (up 11% to 12%) and EBITDA of $20-22m (up 6% to 17%) at their recent trading update.
The revenue was a 6% miss to Bell Potter estimates.
The EBITDA at the mid-point was a 5% miss to its forecast.
According to Bell Potter, the company has recalibrated growth levers and implemented some new pricing/marketing initiatives in Mar-May.
In FY27, the company expect a clear path to achieving ~$40m EBITDA post these initiatives independent of the revenue growth.
Upside remains
Bell Potter has reduced its price target on this ASX consumer discretionary stock to $7 (previously $13).
Despite the reduction, the updated price target from Bell Potter still indicates an upside potential of 41% from yesterday's closing price.
While our estimates continue to factor in some downside risk to current company expectations/consensus, we see long term valuation support in a high-quality e-commerce retailer with range, pricing/scale advantages, AI/data capability backed by a strong balance sheet (~$160m cash, BPe) to take up inorganic growth opportunities.
It's worth noting that Bell Potter isn't the only broker seeing this ASX consumer discretionary as a buy-low candidate.
Macquarie renewed its buy rating on Temple & Webster shares recently with a $13.70 target.
This implies a potential 173% upside.
On the bear side, DP Wealth Advisory named this online furniture retailer's shares as a sell earlier this week.
It thinks that the higher oil prices and interest rates are likely to weigh on discretionary spending.
