(Sharecast News) – Dunelm was under the cosh on Tuesday after RBC Capital Markets downgraded the homeware retailer to ‘underperform’ from ‘sector perform’ and slashed the price target to 1,000p from 1,300p.
“We view Dunelm as a well-managed business with a strong position in the UK homewares market,” it said.
“However, with cost-of-living pressures persisting, unfavourable movements in the UK housing market and only a moderate store expansion story, we think that growth will be more difficult to come by now.”
As a result, RBC said it sees greater upside potential in travel – SSP, WH Smith and Dufry – and discount retailers such as Associated British Foods and B&M European Value, “given strong topline momentum and meaningful expansion for these names”.
At 0945 BST, Dunelm shares were down 5.4% at 1,060p.
