Dunelm Group shares advanced 4% on Thursday after Deutsche Bank upgraded the home furnishings retailer to a buy rating, citing improving fundamentals and valuation support.
The London-listed stock climbed to 861.78 pence by 12:57 PM Brasília time, up from the September 2 closing price of 832 pence. The move follows a 25% decline in Dunelm’s shares this year, underperforming the FTSE 350 Retail index by roughly 30%.
Deutsche Bank raised its price target to 1,050 pence from 850 pence, implying a potential 25% upside from current levels. The firm also lifted its pre-tax profit forecast for fiscal 2027 by 4% to £219 million, while projecting a 4% increase in sales for the same period.
The upgrade comes ahead of Dunelm’s strategic update scheduled for September 8. Deutsche Bank highlighted the company’s long-term market share target of 10% in the UK, up from 7.9% in fiscal 2025, as a key driver of its bullish outlook.
The bank also noted plans for nine store openings in fiscal 2027, compared with three in fiscal 2026. Approximately 10% of Dunelm’s store portfolio is estimated to be in a phase requiring major remodeling, while roughly 60% of units have not been updated since before the pandemic. The retailer’s new mobile application, launched in February, was cited as part of its digital innovation strategy.
Dunelm’s shares had lagged peers amid broader retail headwinds, but the Deutsche Bank upgrade signals growing confidence in the company’s turnaround prospects.
