Citi's 8 ASX stock picks poised for strong growth and resilient to tariffs

As global markets navigate US tariff uncertainties, Citi has spotlighted a selection of ASX small and mid-cap companies offering investors high-growth opportunities through 'disruptive strategies'.

These companies, spanning retail, telecos and technology, are largely insulated from tariff-related disruptions and positioned for strong growth. We list the stocks, key takeaways and target prices below.

Source: Citi Research

Furniture Retail Shines

Temple & Webster TPW is carving out a dominant position in Australia’s online furniture market, taking share from traditional retailers. Citi highlights its focus on private-label products, AI-driven efficiencies, and a target for repeat orders to exceed 80% of sales. The company’s push into B2B and home improvement categories, expected to contribute 20% of sales in the medium term, adds to its appeal.

The stock is up 80% year-to-date, largely driven by a strong first-half FY25 result announced on 13 February. TPW reported revenue growth of 23.6% to $313.7 million (1.1% ahead of consensus), while underlying NPAT jumped 117.2% to $9.0 million (77% ahead of consensus).

Despite a surging share price, the company launched an on-market share buyback of up to 10% of issued capital on 2 June. This may reflect both a strong balance sheet and expectations of further growth.

Similarly, Nick Scali NCK is set to benefit from an improving housing market and potential store expansion, with longer-term growth prospects in the UK. The stock has performed relatively well, up 27% year-to-date.

Beacon Lighting Targets Trade and Retail Growth

Beacon Lighting BLX is capitalising on its pivot to the trade segment, which now accounts for 39% of sales with a goal of 50%. Citi sees store rollouts and a recovering housing market boosting retail earnings, while investments in design and new products strengthen margins.

Despite its $850 million market cap, Beacon Lighting often flies under the radar due to the stock’s low liquidity. The company’s CEO, Glen Robinson, is also the director of Large Format Property Fund Group, which owns approximately 55% of Beacon’s issued shares.

Tuas Disrupts Singapore’s Telecom Market

Tuas TUA is shaking up Singapore’s telecom sector with competitive mobile and broadband offerings. Citi notes its success in capturing market share in both pre-paid and post-paid mobile segments, alongside a broadband market with little differentiation among competitors. Tuas’s global travel eSIM and potential regional expansion signal further growth.

Despite Citi's bullish view, the stock suffered a steep 15% selloff between 26-27 March after its half-year FY25 result flagged weaker-than-expected subscriber growth. The selloff erased the stock's year-to-date gains, currently down 7% for the year.

a2 Milk Rides Favorable Trends

a2 Milk A2M is poised for accelerated growth, supported by favorable market trends and reduced domestic competition in its markets. Citi points to new product development and potential US infant formula registration as key drivers, with room for capital management adding upside.

The former infant formula darling is making a comeback, up 40% year-to-date. Its first-half FY25 result highlighted accelerating revenue growth to 10% and an FY25 guidance upgrade to low-to-mid double-digit growth.

Superloop Challenges Australia’s NBN Market

Superloop SLC is gaining traction in Australia’s broadband market with high-speed, low-latency services. Its competitive pricing and a key contract with Origin Energy, driving over 10,000 monthly customer additions, set the stage for earnings growth. Upcoming wholesale pricing changes and speed upgrades in 2025 could further boost its market share.

Megaport Benefits from AI and Cloud Trends

Megaport MP1 is well-positioned to capitalise on AI-driven demand for cloud connectivity. Citi expects growth from an expanding product suite, including data-center interconnect and potential network security offerings, alongside geographic expansion under new leadership.

Megaport's twelve-month performance returned to positive territory this week, marking a nearly 100% year-to-date rally. A weaker-than-expected FY24 result on 21 August drove the stock 40% lower over the following three months. The stock managed to recoup most of those losses with a solid first-half FY25 result on 20 February. Analysts viewed the results as in-line, highlighting robust sales growth driven by a revitalised sales team and accelerating customer acquisition. The stock is benefiting from an improving macro environment, particularly in the US SaaS sector, where net revenue retention (NRR) stabilised for the first time in years.

Ingenia Leads in Retirement Housing

Ingenia INA is a standout in Australia’s land lease housing market for retirees, with a portfolio of approximately 12,000 sites. With a penetration rate of just 1% compared to over 3% for competing models, Citi sees significant growth potential. Cost efficiencies in homes and clubhouses, combined with a valuation of 17x FY26 earnings, make it an attractive pick.