HIGHLIGHTS

  • Jefferies holds a BUY rating on WiseTech Global (ASX: WTC) with a price target of A$72.00 — implying approximately 96% upside from the current price of A$36.67, despite the stock declining 64% over the past year.
  • Jefferies holds a BUY rating on Temple &Amp; Webster (ASX: TPW) with a price target of A$8.95 — implying approximately 84% upside from the current price of A$4.86, with the stock having fallen 20% in just the past five trading sessions.
  • Both companies have reported solid operational results in their most recent updates — WiseTech delivered 76% total Revenue growth and is executing an AI-led transformation, while Temple & Webster posted the most profitable April in its history and is guiding for FY27 EBITDA to nearly double.

 

In a market environment defined by macro uncertainty, rising consumer caution, and persistent technology sector de-rating, identifying credible recovery candidates requires both analytical rigour and an appetite for contrarian conviction. Jefferies — one of the most actively followed institutional Brokers in the Australian equities market — has done exactly that, maintaining BUY recommendations on two ASX-listed companies that have each experienced dramatic share price declines: WiseTech Global Limited (ASX:WTC) and Temple & Webster Group Limited (ASX:TPW).

These are not comparable businesses. WiseTech is a global B2B software platform serving the logistics and Supply chain industry across 193 countries. Temple & Webster is Australia's leading online retailer of furniture and homewares, serving millions of domestic consumers. What they share is a combination of genuine long-term competitive positioning, near-term Earnings complexity that has frustrated the market, and — in Jefferies' view — share prices that have overcorrected well below Intrinsic Value. This article examines the broker's thesis for each company, the latest operational evidence, and what the combination of these two calls says about the Investment landscape for growth-oriented ASX companies in 2026.

 

WiseTech Global

A Platform Business at the Centre of Global Trade

WiseTech Global is not a consumer-facing Brand and it does not feature in most retail investor conversations, but it is one of the most strategically significant software businesses Australia has ever produced. The company's CargoWise platform is the operating system of choice for the world's largest logistics companies — serving more than 22,000 logistics participants across 193 countries, including 46 of the top 50 global third-party logistics providers and 23 of the 25 largest global freight forwarders. CargoWise handles everything from customs compliance and trade finance to freight forwarding, Warehousing, and container management. The platform is deeply embedded in the daily operational workflows of its users, which creates extremely high switching costs and a durable, Recurring Revenue base.

The company's business model has evolved over recent years from a seat-fee licensing structure to a transaction-based commercial framework — the CargoWise Value Packs model — which aligns pricing with the value that automation and throughput deliver to customers. This transition, now live with approximately 95% of CargoWise customers, positions the company to benefit directly from growth in global trade volumes and automation adoption rather than merely counting licensed users. For Jefferies, this commercial model evolution is a key element of the long-term earnings growth thesis.

1H26 Results: Transformative Revenue Growth, Complex Earnings Picture

WiseTech's financial results for the six months ended 31 December 2025 reflected the consolidation of its Acquisition of e2open — a US-based cloud supply chain platform acquired in August 2025 for approximately $2.4 billion. Total revenue for the half reached $672 million, up 76% on the prior period. The core CargoWise platform contributed $372.4 million of that figure, growing 12% — or 9% organically — driven by large global freight forwarder rollouts, price increases calibrated to Inflation, and the transition to the new Value Pack model.

EBITDA for the half was $252.1 million, up 31% on the prior period, though the reported EBITDA Margin compressed from 50% to 38% due to e2open consolidation costs, restructuring, and M&A expenses. Stripping out the acquisition-related noise, the organic EBITDA margin held steady at 51% — one of the highest margins in the global enterprise software industry and a testament to the Operating Leverage inherent in a platform business with high recurring revenue and low incremental delivery costs. Underlying NPAT was $114.5 million, up 2%, while statutory NPAT fell 36% to $68.1 million, primarily reflecting increased intangible Amortisation and interest expenses tied to the e2open Debt Facility.

The AI Transformation: A Structural Reset of the Cost Base

The most consequential strategic announcement from WiseTech in its 1H26 results was the scope of its artificial intelligence transformation program. CEO Zubin Appoo stated publicly that the era of manually writing code as the core act of engineering is over — a bold declaration that is being backed by equally bold action. The company announced plans to reduce headcount across product and development and Customer Service teams — both within WiseTech and within the recently acquired e2open — by up to 50%. This is expected to affect approximately 2,000 roles across FY26 and into FY27.

The strategic logic is grounded in the Economics of AI-assisted software development. As AI tools increasingly automate code generation, testing, defect resolution, and customer service interactions, the number of human engineers and support staff required to maintain and enhance a given level of software output diminishes significantly. For a company that invested $175.3 million in R&D during the half — equating to 26% of total revenue — the prospect of delivering the same development productivity with a fraction of the headcount represents a profound potential improvement in the structural cost base. Management has been clear that the financial benefit of this program will flow through primarily in FY27 and beyond, as restructuring costs will offset savings in the near term.

The e2open integration has also proceeded ahead of schedule. WiseTech achieved its FY27 cost synergy target of $50 million annualised run rate savings in January 2026 — nearly a year and a half earlier than originally planned. This is meaningful because it demonstrates management's execution capability and removes a key risk overhang that had been weighing on sentiment since the acquisition was announced.

Jefferies' BUY Thesis: Conviction at $72

Jefferies has maintained its BUY recommendation on WiseTech with a price target of A$72.00 per share. From the current price of A$36.67, this implies potential upside of approximately 96% — near doubling of the current share price.

The company has reaffirmed full-year FY26 guidance for revenue of $1.39 to $1.44 billion — representing growth of 79% to 85% — and EBITDA of $550 to $585 million with a margin of 40% to 41%. Net leverage, which reached 3.2 times following the acquisition drawdown, is expected to reduce to approximately 3.0 times by year end and 2.5 times by the end of FY27, on a path to the long-term target of below 2.0 times by August 2028. The Balance Sheet trajectory, combined with the operational momentum of CargoWise, underpins Jefferies' view that the current share price significantly undervalues the long-term earnings potential of this business.

 

Temple & Webster

Australia's Leading Online Homewares Retailer

Temple & Webster Group was founded in 2011 with a mission to transform the way Australians shop for furniture and homewares. The company pioneered a drop-shipping model in Australia — products are sent directly from suppliers to customers, eliminating the need for Temple & Webster to hold inventory while enabling a dramatically broader product range and faster delivery times. This asset-light model creates favourable economics relative to traditional bricks-and-mortar furniture retailers: lower Capital intensity, greater flexibility on product assortment, and the ability to scale revenue without proportional increases in Working Capital or Warehouse infrastructure.

The company operates in a total addressable market of approximately $40 billion across furniture, homewares, and home improvement in Australia. Despite this market scale, online penetration of furniture retail in Australia has historically been lower than in comparable markets such as the United Kingdom and United States, which means Temple & Webster's Long-term Growth runway — even in a challenging consumer environment — remains structurally supported by the ongoing migration of purchasing behaviour from physical to digital channels.

A Deliberate Pivot: Choosing Margin Over Growth

The context for understanding Temple & Webster's recent share price performance requires looking at the macroeconomic backdrop. In its 13 May 2026 trading update, management acknowledged that consumer confidence has reached historic lows in Australia. For a business operating in the discretionary large-ticket spending segment, this is a material headwind. Sofas, dining tables, bedroom furniture, and kitchen renovation products are precisely the categories that consumers defer first when financial anxiety rises.

Rather than maintaining its growth-oriented investment posture in the face of this environment, Temple & Webster's management made a deliberate decision to rebalance priorities. Over approximately two months, the company implemented a comprehensive margin optimisation program that included rolling out a new promotional cadence, repricing the entire product catalogue, renegotiating supplier terms to secure additional support, restructuring Marketing campaigns for efficiency, and moderating Fixed Cost growth. The speed and scope of this response is enabled by the inherent agility of the drop-shipping model: there is no physical store network to manage, no inventory overhang to clear, and no Lease obligations that lock in fixed costs at a legacy level.

The Result: A Historic Month for Profitability

The tangible outcome of the margin optimisation program was striking. EBITDA for April 2026 reached approximately $2.5 million — the most profitable April in Temple & Webster's history, by a substantial margin. This result is not incidental; it reflects the operating leverage that sits within the business model when management deliberately allocates resources toward margin rather than Volume. A digital retail business with a large, repriced product catalogue, efficient supplier terms, and optimised marketing spend can translate revenue into profit at rates that surprise to the upside.

For the full year FY26, Temple & Webster has guided revenue of $665 million to $675 million, representing growth of 11% to 12% on the prior comparable period — a resilient outcome given the consumer headwinds. EBITDA is guided at $20 million to $22 million, a range that includes approximately $3 million of New Zealand start-up investment costs. The step-up in profitability is concentrated in Q4 FY26, as the benefit of the margin program flows through fully in the final quarter.

The FY27 Opportunity: Near-Doubling of EBITDA Even Without a Recovery

The most compelling element of Temple & Webster's investment case right now is the FY27 implication that management has explicitly flagged. At current margin run-rates — without any recovery in consumer confidence and assuming only a low-growth revenue scenario — EBITDA in FY27 would reach approximately $40 million. This represents an near-doubling from the $20–$22 million guided for FY26, and it is achievable without relying on any macroeconomic tailwind. The mechanism is straightforward: the higher gross margin and tighter cost structure achieved through the optimisation program, applied to a broadly similar revenue base, generates dramatically more EBITDA per dollar of revenue.

Beyond the near-term margin story, Temple & Webster retains its long-term aspiration to reach $1 billion in revenue by FY28. Emerging growth areas — including home improvement products, the B2B and Trade and Commercial channel, and the recently launched New Zealand operations — are all performing well and represent incremental contributors to the longer-term revenue trajectory. The company's on-Market Share buyback program also remains in place with significant remaining capacity, signalling Board-level confidence that the current share price undervalues the business.

Jefferies' BUY Thesis: $8.95 Target and High Conviction

Jefferies has a BUY recommendation on Temple & Webster with a price target of A$8.95. From the current price of A$4.86 — following the 20% decline over five trading sessions — this implies upside of approximately 84%.

Jefferies is not alone in its conviction: Canaccord Genuity has a BUY with an even higher price target of A$12.50, implying 157% upside. The alignment of multiple institutional brokers on the BUY thesis — despite the share price having halved from its recent highs — reflects a genuine consensus view that the selloff has materially overshot the underlying change in fundamental outlook.

Conclusion

Jefferies' BUY ratings on WiseTech Global and Temple & Webster represent two of the most interesting contrarian calls currently active on the ASX. Both stocks have suffered significant share price declines that reflect genuine near-term challenges — a transformative acquisition and AI-driven workforce restructuring in WiseTech's case, and historic-low consumer confidence in Temple & Webster's. Yet in both instances, the underlying competitive positions remain intact, the most recent operational results contain genuine positives, and the management teams have demonstrated the discipline and agility to navigate difficult conditions without permanently impairing the business model. Jefferies, with targets of A$72.00 for WiseTech and A$8.95 for Temple & Webster, is making a clear statement: the selloffs have created opportunity. Whether the market comes around to that view will depend on the pace of the AI transition at WiseTech, the trajectory of Australian consumer spending, and the patience of investors willing to look past the noise to the earnings potential that lies on the other side.