Morgan Stanley has defended Temple & Webster Group's high premium through comparison to global leader, Wayfair. The broker highlighted Temple & Webster Group's 26% year-on-year sales increase compared to Wayfair's -10% decline. 

The broker further notes Wayfair is operating on a bigger revenue base of $17bn, compared to Temple & Webster Group's $0.3bn, implying less leverage in the former. Temple & Webster Group further operated in a less competitive market, underpinning higher terminal margins.

The Overweight rating and target price of $16.00 are retained. Industry view: In-Line.

Sector: Retailing.

Target price is $16.00.Current Price is $12.21. Difference: $3.79 - (brackets indicate current price is over target). If TPW meets the Morgan Stanley target it will return approximately 24% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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