Jefferies upgrades Dunelm to “buy” after shares slide 20%, sees value at 11x PE
#Jefferies #Dunelm #Stock Upgrade #Price-to-Earnings #Equity Research #Retail Sector #Investment #Market Valuation
📌 Key Takeaways
- Jefferies has upgraded Dunelm from 'hold' to 'buy' following a 20% drop in share price.
- The retailer is currently trading at a valuation of 11 times price-to-earnings (PE).
- Analysts view the recent stock decline as an attractive entry point for investors.
- Dunelm continues to demonstrate resilience and market share growth despite UK economic headwinds.
📖 Full Retelling
Investment bank Jefferies officially upgraded its rating of British home furnishings retailer Dunelm from 'hold' to 'buy' on Monday following a significant 20% slide in the company's share price. The upgrade, issued as part of a strategic market analysis in London, comes as analysts identified a rare valuation opportunity after the stock’s recent decline, which has left the retailer trading at what Jefferies considers an attractive 11 times price-to-earnings (PE) ratio. The shift in sentiment is driven by the belief that the current market price does not accurately reflect Dunelm's resilient market position and long-term earnings potential.
The analysts at Jefferies noted that the recent sell-off has decoupled Dunelm's stock price from its fundamental operational strength. By trading at 11x PE, the retailer is now valued significantly below its historical averages, providing a safety margin for new investors. Despite broader macroeconomic pressures affecting the UK retail sector, including fluctuating consumer confidence and rising operational costs, Dunelm has consistently demonstrated an ability to gain market share through its digital expansion and varied product offerings.
Furthermore, the upgrade highlights Dunelm's robust balance sheet and its track record of maintaining high margins compared to industry peers. Jefferies pointed out that the 20% pullback provides a tactical entry point for investors seeking exposure to the UK’s discounter and home improvement space. As the company continues to optimize its supply chain and physical store footprint, the bank expects a normalization of the valuation multiple, potentially leading to a sharp recovery in share value as market volatility subsides.
🏷️ Themes
Finance, Retail, Stock Market
📚 Related People & Topics
Dunelm
Topics referred to by the same term
Dunelm is an abbreviation of the Latin word Dunelmensis (of Durham). It is also use in the name of various things, often associated with Durham.
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📄 Original Source Content
try{ var _=i o; . if(!_||_&&typeof _==="object"&&_.expiry As Claude disrupts stock market, Anthropic researcher warns ’world is in peril’ Gold, silver prices rise amid U.S.-Iran tensions, blowout January payrolls data Dow halts three-day win streak as blowout jobs data curbs rate cut bets Citi pushes back Fed rate cuts to May after blowout January jobs report (South Africa Philippines Nigeria) Jefferies upgrades Dunelm to “buy” after shares slide 20%, sees value at 11x PE Author Navamya Acharya Stock Markets Published 02/09/2026, 04:06 AM Jefferies upgrades Dunelm to “buy” after shares slide 20%, sees value at 11x PE 0 DNLM -0.78% Investing.com -- Jefferies has upgraded UK homewares retailer Dunelm to “buy” from “hold,” saying a sharp fall in the share price following weaker quarterly trading has left the stock trading at a valuation the broker considers attractive. The upgrade comes after Dunelm shares fell about 20% following a softer second-quarter trading performance. Stay ahead with live news, stock impact insights, and Wall Street analysis - save up to 50% Jefferies said the sell-off followed guidance that cut full-year FY26 profit before tax expectations by about 4%, after revenue growth slowed to 1.6% in the second quarter from 6.2% in the first. Jefferies noted that first-half revenue growth was still 3.6%. Jefferies said Dunelm is now trading at about 11x forecast FY27 earnings, which it described as roughly 30% below the company’s long-term average valuation. The broker kept its price target unchanged at 1,075p, implying upside of about 16% from the prior closing price of 930p. Dunelm’s market capitalisation is listed at £1.9 billion. The broker left its profit forecasts unchanged, maintaining expectations for profit before tax growth of 2% in FY26 and 5% in FY27. Jefferies said Dunelm continues to generate steady growth, supported by its customer proposition and position in a fragmented UK homewares market. Jefferies data show Dunelm revenue rose to £1.7...