Dunelm Group plc

LSE:DNLM Stock Report

Market Cap: UK£2.3b

Dunelm Group Valuation

Is DNLM undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of DNLM when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: DNLM (£11.54) is trading below our estimate of fair value (£16.41)

Significantly Below Fair Value: DNLM is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for DNLM?

Key metric: As DNLM is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for DNLM. This is calculated by dividing DNLM's market cap by their current earnings.
What is DNLM's PE Ratio?
PE Ratio15.5x
EarningsUK£151.20m
Market CapUK£2.34b

Price to Earnings Ratio vs Peers

How does DNLM's PE Ratio compare to its peers?

The above table shows the PE ratio for DNLM vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average26.7x
SCS ScS Group
21.5x26.7%UK£95.6m
FRAS Frasers Group
8.2x9.3%UK£3.2b
PETS Pets at Home Group
16.1x14.3%UK£1.3b
PROC ProCook Group
60.9x52.5%UK£37.2m
DNLM Dunelm Group
15.5x5.6%UK£2.3b

Price-To-Earnings vs Peers: DNLM is good value based on its Price-To-Earnings Ratio (15.5x) compared to the peer average (26.7x).

Price to Earnings Ratio vs Industry

How does DNLM's PE Ratio compare vs other companies in the GB Specialty Retail Industry?

1 CompanyPrice / EarningsEstimated GrowthMarket Cap
WRKS TheWorks.co.uk
2.2xn/aUS$17.62m
No more companies available in this PE range
DNLM 15.5xIndustry Avg. 16.2xNo. of Companies6PE01020304050+
1 CompanyEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: DNLM is good value based on its Price-To-Earnings Ratio (15.5x) compared to the UK Specialty Retail industry average (16.2x).

Price to Earnings Ratio vs Fair Ratio

What is DNLM's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

DNLM PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio15.5x
Fair PE Ratio14.5x

Price-To-Earnings vs Fair Ratio: DNLM is expensive based on its Price-To-Earnings Ratio (15.5x) compared to the estimated Fair Price-To-Earnings Ratio (14.5x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst DNLM forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUK£11.54
UK£12.73
+10.3%
7.5%UK£14.70UK£11.60n/a11
Nov ’25UK£11.26
UK£12.84
+14.0%
7.7%UK£14.70UK£11.60n/a12
Oct ’25UK£11.48
UK£12.74
+11.0%
8.9%UK£14.70UK£11.20n/a11
Sep ’25UK£12.45
UK£12.27
-1.4%
9.2%UK£14.10UK£10.60n/a11
Aug ’25UK£12.41
UK£12.27
-1.1%
9.2%UK£14.10UK£10.60n/a11
Jul ’25UK£10.59
UK£11.71
+10.5%
11.0%UK£14.10UK£10.00n/a11
Jun ’25UK£11.01
UK£11.75
+6.7%
10.5%UK£14.10UK£10.00n/a12
May ’25UK£9.89
UK£11.75
+18.9%
10.5%UK£14.10UK£10.00n/a12
Apr ’25UK£11.32
UK£11.98
+5.9%
9.7%UK£14.10UK£10.50n/a12
Mar ’25UK£11.60
UK£11.98
+3.3%
9.7%UK£14.10UK£10.50n/a12
Feb ’25UK£10.89
UK£11.99
+10.1%
9.6%UK£14.10UK£10.50n/a12
Jan ’25UK£10.97
UK£11.93
+8.8%
9.4%UK£13.75UK£10.45n/a12
Dec ’24UK£10.50
UK£11.93
+13.6%
9.4%UK£13.75UK£10.45n/a12
Nov ’24UK£9.78
UK£12.14
+24.2%
10.5%UK£14.00UK£10.00UK£11.2612
Oct ’24UK£10.50
UK£12.16
+15.8%
10.2%UK£14.00UK£10.00UK£11.4814
Sep ’24UK£11.45
UK£12.41
+8.4%
8.9%UK£14.00UK£10.00UK£12.4514
Aug ’24UK£11.65
UK£12.45
+6.8%
9.4%UK£14.50UK£10.00UK£12.4114
Jul ’24UK£11.21
UK£12.55
+11.9%
8.5%UK£14.50UK£10.50UK£10.5914
Jun ’24UK£11.17
UK£12.52
+12.1%
8.7%UK£14.50UK£10.50UK£11.0114
May ’24UK£11.46
UK£12.47
+8.8%
8.8%UK£14.50UK£10.50UK£9.8913
Apr ’24UK£11.05
UK£12.42
+12.4%
8.9%UK£14.50UK£10.50UK£11.3212
Mar ’24UK£12.45
UK£12.41
-0.3%
9.3%UK£14.50UK£10.50UK£11.6011
Feb ’24UK£11.78
UK£11.11
-5.7%
19.5%UK£13.75UK£7.00UK£10.8910
Jan ’24UK£9.79
UK£9.87
+0.8%
19.7%UK£13.75UK£7.00UK£10.9711
Dec ’23UK£10.07
UK£9.74
-3.3%
22.1%UK£13.75UK£7.00UK£10.5011
Nov ’23UK£8.75
UK£10.01
+14.4%
20.7%UK£13.75UK£7.10UK£9.7810

Analyst Forecast: Target price is less than 20% higher than the current share price.

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