Dunelm should deliver 'solid' festive performance, Deutsche Bank predicts

Dunelm shares were boosted by a note from Deutsche Bank on Friday, anticipating an upbeat update next month covering the Christmas period.

Deutsche upped its share price target for Dunelm to 685p from 640p, with its recommendation remaining 'hold' following a challenging 12 months but where like-for-like sales and space expansion have recently accelerated and the integration of acquired online business WorldStores appears to be performing on track.

Looking forward to the homewares retailer's post-festive update in January, analysts forecast a solid performance due to modest comparatives and from faster online growth due to the added WorldStores ranges.

LFL sales are predicted to be up 2% and total sales 12.9%, including £15m perimeter effect of consolidating the final two months of WorldStores.

With slightly more optimistic second and third quarter sales assumptions, analysts increased forecasts 3%, implying Dunelm trades on 13 calender 2018 P/E ratio with a 7% free cash flow yield.

DB retiatered 'buy' ratings for Associated British Foods, B&M European Value and Boohoo as its top picks in the non-food retail sector.