Canaccord Genuity hails growth prospects at Dunelm despite CEO exit

(Sharecast News) - The surprise retirement of Dunelm's boss shouldn't put off investors from the homeware retailer's strong growth prospects, according to Canaccord Genuity which reiterated its 'buy' rating on the stock. Nick Wilkinson announced on Tuesday that he would be stepping down from the company, choosing to retire from full-time executive life.

But while his departure creates some uncertainty for the business - the company is starting a thorough recruitment process and considering both internal and external candidates - analyst Mark Photiades from Canaccord Genuity isn't fazed.

"We continue to believe that Dunelm offers an attractive growth opportunity with significant share gain opportunities in under-penetrated categories coupled with further UK store expansion potential," Photiades said.

"The retirement of well-respected CEO Nick Wilkinson after nearly eight years, whilst not expected, should not detract from the group's long-term growth opportunity."

The news came alongside Dunelm's first-half results, which showed a "robust" performance, Photiades said, with continued market outperformance despite a challenging macro environment.

The analyst highlighted that the price-to-earnings ratio of 12.9x offers good value for a market leader with strong growth prospects.

The stock was trading 0.5% higher at 978p by 1203 GMT, with plenty of upside to Canaccord Genuity's 1,270p target price.