Citi hikes Temple and Webster's price target; ups FY27 NPAT forecast

** Citi raises price target for Temple and Webster Group TPW.AX by 30% to A$5.66

** Brokerage ups TPW's FY27 NPAT forecast by 5%, primarily due to better-than-expected sales momentum since co's last update in August

** Citi cuts its FY28 NPAT estimate for the online furniture retailer by 10%, assuming some margin investment to achieve the double-digit revenue growth the co is targeting from FY28

** Brokerage remains cautious despite improving sales trends and traction from management's growth initiatives, as sales continue declining and housing-linked categories face increasingly challenging consumer backdrop

** The key risk is that restoring double-digit growth from FY28 ultimately requires higher promotional activity and marketing investment, potentially eroding some margin gains from the past six months, Citi adds

** Four of 13 analysts rate the stock "buy" or higher, eight "hold" and one "sell"; their median PT is A$5.40 – LSEG data

** Stock down 60.3% for the year, as of last close