Dunelm Group (LON:DNLM) Trading Down 19.5% – Should You Sell?

Shares of Dunelm Group plc (LON:DNLM) dropped 19.5% during trading on Thursday . The stock traded as low as GBX 941.50 and last traded at GBX 941.50. Approximately 3,357,217 shares changed hands during mid-day trading, an increase of 213% from the average daily volume of 1,072,808 shares. The stock had previously closed at GBX 1,170.

Key Stories Impacting Dunelm Group

Here are the key news stories impacting Dunelm Group this week:

• Positive Sentiment: Shore Capital reaffirmed a “buy” rating on Dunelm, which provides broker support that can help limit downside or attract buyers. Shore Capital reaffirms buy (Digital Look)
• Positive Sentiment: Technical note — Dunelm’s share price recently crossed above its 200-day moving average, a bullish technical signal that may attract momentum traders. Share price crosses above 200-day MA (American Banking News)
• Negative Sentiment: Investors Chronicle reports Dunelm shares tumbled after festive demand was weaker than expected — this retail demand miss is weighing on near-term revenue visibility. Dunelm shares tumble as festive demand takes a hit (Investors Chronicle)
• Negative Sentiment: Company update / earnings coverage indicates Q2 sales growth has slowed and management warned full-year profit could be at the low end of expectations — a clear fundamental catalyst behind today’s sell-off. Q2 sales growth slows; profit warning (Investing.com)

Analysts Set New Price Targets

A number of research analysts have issued reports on the company. Jefferies Financial Group lifted their price objective on Dunelm Group from GBX 1,755 to GBX 1,817 and gave the company a “hold” rating in a report on Tuesday, October 28th. UBS Group reiterated a “buy” rating and set a GBX 1,360 target price on shares of Dunelm Group in a research report on Friday, October 17th. JPMorgan Chase & Co. lifted their price target on shares of Dunelm Group from GBX 1,140 to GBX 1,240 and gave the company a “neutral” rating in a report on Tuesday, October 28th. Shore Capital restated a “buy” rating on shares of Dunelm Group in a research report on Thursday. Finally, Royal Bank Of Canada raised shares of Dunelm Group to an “outperform” rating and raised their price objective for the stock from GBX 1,200 to GBX 1,300 in a report on Monday, November 3rd. Six analysts have rated the stock with a Buy rating and two have given a Hold rating to the company. Based on data from MarketBeat, the company currently has a consensus rating of “Moderate Buy” and an average price target of GBX 1,397.13.

Dunelm Group Stock Down 19.5%

The stock has a market cap of £1.90 billion, a price-to-earnings ratio of 12.26, a PEG ratio of -10.32 and a beta of 1.18. The company has a debt-to-equity ratio of 236.84, a quick ratio of 0.16 and a current ratio of 1.04. The firm’s 50-day simple moving average is GBX 1,113.57 and its two-hundred day simple moving average is GBX 1,140.89.

Insider Activity at Dunelm Group

In related news, insider Luisa Wright sold 2,257 shares of the business’s stock in a transaction that occurred on Monday, November 10th. The shares were sold at an average price of GBX 1,121, for a total value of £25,300.97. Also, insider Karen Witts acquired 10,790 shares of Dunelm Group stock in a transaction on Monday, December 1st. The shares were purchased at an average cost of GBX 1,104 per share, for a total transaction of £119,121.60. Over the last 90 days, insiders have bought 17,790 shares of company stock worth $20,056,160 and have sold 61,854 shares worth $70,913,541. Insiders own 34.16% of the company’s stock.

About Dunelm Group

Dunelm is the UK’s market leader in homewares with a purpose ‘to help create the joy of truly feeling at home, now and for generations to come’. Its specialist customer proposition offers value, quality, choice and style across an extensive range of c.70,000 products, spanning multiple homewares and furniture categories and including services such as Made to Measure window treatments.

The business was founded in 1979 by the Adderley family, beginning as a curtains stall on Leicester market before expanding its store footprint.