Value homewares specialist Dunelm has been a favourite in the downturn. Investors like its low-ticket offer and the retailer expects to land good property deals as a result of others’ struggles, aiding expansion.
On Monday, UBS downgraded Dunelm from buy to neutral, because Dunelm’s shares had performed so well rather than poor prospects.
Since the start of the year, Dunelm has outperformed its general retail peers by 49 per cent and the FTSE 250 by 76 per cent.
UBS analyst Isabel Green said: “Its store roll-out potential, strong management team and cash-positive balance sheet deserve a premium rating to the sector. However, trading at an 11 per cent premium, we believe this is mostly in the price.”
Dunelm will issue an interim management statement at the end of this month.