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Dunelm Group (DNLM)

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Down 1,088.00p
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JP Morgan ups target price on 'attractive' Dunelm

26 Jun 19

LONDON (ShareCast) - (Sharecast News) - Analysts at JP Morgan bumped up their target price on home furnishing retailer Dunelm up to 785p from their previous 750p watermark on Wednesday, stating the group's shares now fully reflected the strong underlying trends.
Following Dunelm's unscheduled trading update last week, which flagged that recent trading had been ahead of expectations, JP Morgan raised its full-year pre-tax profit forecasts for the group by 3% and 5% for over the next two years, respectively.

"In our view, Dunelm is displaying strong underlying trends and is one of the more attractive equity stories within our UK coverage at present," said JP Morgan.

However, JPM's analyst said they were cognizant that online growth had been "a strong support to the top-line", noting that that particular channel often brought about "incremental costs".

"Furthermore, Dunelm has consistently demonstrated that it is willing to reinvest to support growth. Overall, therefore, we think that there is limited further upside risk to forecasts from here," added JPM.

Combined with the stock being one of the strongest performers year-to-date, up 78% and trading on a 2019/2020 price-earnings of 18.6x/17.6x, JPM now thought Dunelm's shares "fully reflect the strong underlying trends".

The investment bank also reiterated its 'neutral' rating on Dunelm's shares.

Note 1: Prices and trades are provided by Digital Look Corporate Solutions and are delayed by at least 15 minutes.


Market Data

Currency UK Pounds
Price 1,088.00p
Change Today -35.00p
52 Week High 1,404.00p
52 Week Low 730.50p
Volume 672,866
Shares Issued 202.24m
Market Cap 2,200.34m


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