FY25 GDP Data Signal Positive Outlook for Consumer Discretionary Sector

This report is an updated version of the report published on 4 September 2025 at 12:51 PM AEST 

Company Overview

Company Overview: Temple & Webster Group Ltd (ASX: TPW) is an Australia-based pure play online retailer of furniture and homewares. The Company has over 200,000 products on sale from hundreds of suppliers. Bapcor Limited (ASX: BAP) is an Australia based company that supplies automotive aftermarket parts, accessories, equipment, services, and solutions. There are four segments within the company. Kalkine’s Sector Report covers the Investment Summary, Sector Overview & Supporting Catalysts, Data Insights & Analysis, Financial Metrics, Financial Commentary, Risks, Outlook, Technical Analysis along with the Valuation, Target Price, and Recommendation on selected stocks.

Investment Summary

Sector Overview and Supporting Drivers

Australia’s Consumer Discretionary sector comprises businesses providing non-essential goods and services, including retail, automotive, leisure, travel, and hospitality. The sector is highly cyclical, with performance closely tied to household income, interest rates, consumer confidence, and economic growth. Recent trends show growing demand in e-commerce, premium goods, and lifestyle experiences, supported by shifting consumer preferences. Catalysts such as wage growth, easing inflation, and tourism recovery could strengthen the outlook, while risks include rising living costs, competition, and supply chain disruptions. Overall, the sector reflects consumer sentiment, offering both opportunities and volatility for investors.

Sector Catalysts

Index Performance

Investment theme and stocks under discussion (TPW, BAP)

After understanding the sector, let us now look at two companies from the Consumer Discretionary sector listed on the ASX. The price potential of the companies under discussion have been analysed based on EV/Sales and price/Earnings based relative valuation methods, respectively.

1. ASX: TPW (Temple & Webster Group Ltd)

(Recommendation: ‘Speculative Buy’ at AUD 22.56; Potential Upside: Low Double-Digit; MCap: AUD 2.70bn)

TPW is an Australia-based pure play online retailer of furniture and homewares. The Company has over 200,000 products on sale from hundreds of suppliers.

The stock has witnessed a correction of ~10.62% in last one month, and over the past six months, the stock is up by 32.64%. The stock has a 52-week low and 52-week high of AUD 10.990 and AUD 29.060, respectively and is currently trading above the mid-point of its 52-week high and low. TPW was last covered in a report dated ‘7 February 2025’.

2.ASX: BAP (Bapcor Limited)

(Recommendation: ‘Speculative Buy’ at AUD 3.465; Potential Upside: Low Double-Digit; MCap: AUD 1.18bn)

BAP is an Australia based company that supplies automotive aftermarket parts, accessories, equipment, services, and solutions. There are four segments within the company.

The stock has corrected ~6.04% in last one month, and over the past six months, it has declined by ~30.87%. The stock has a 52-week low and 52-week high of AUD 3.420 and AUD 5.470, respectively and is currently trading below its 52-week high-low average. BAP was last covered in a report dated ‘13 June 2024’.

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing. 

Note 1: Past performance is neither an Indicator nor a guarantee of future performance. 

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 4 September 2025. The reference data in this report has been partly sourced from REFINITIV. 

Note 3: Investment decisions should be made depending on an individual’s appetite for upside potential, risks, holding duration, and any previous holdings. An ‘Exit’ from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above. 

Note 4: Kalkine reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 25-30 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice. 

Technical Indicators Defined: - 

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.