eyeQ: Dunelm needs this to boost its share price
Experts at eyeQ use AI and their own smart machine to generate actionable trading signals. Here, it explains what must happen to drive these shares higher.
9th September 2025 09:41
by Huw Roberts from eyeQ
A Dunelm store at the Clock Tower retail park in Chelmsford, Essex. Picture: John Keeble/Getty Images.
“Our signals are crafted through macro-valuation, trend analysis, and meticulous back-testing. This combination ensures a comprehensive evaluation of an asset's value, market conditions, and historical performance.” eyeQ
- Discover: eyeQ analysis explained | eyeQ: our smart machine in action | Glossary
Dunelm
Macro Relevance: 66%
Model Value: 1,162.18p
Fair Value Gap: +6.35% premium to model value
Data correct as at 9 September 2025. Please click glossary for explanation of terms. Long-term strategic model.
Dunelm reported strong full-year results this morning, yet the share price has slipped lower. The company neatly captures the glass half-empty, glass half-full debate currently surrounding British retailers and the UK economy more broadly.
The positive view is that Dunelm Group (LSE:DNLM) enjoys strong margins and that the latest British Retail Consortium (BRC) survey suggested strong retail sales over August.
The negative view is Dunelm management describes current conditions as a “volatile consumer environment”, and that the BRC survey was potentially flattered by August’s good weather with signs of caution creeping in ahead of November’s Budget.
On eyeQ, Dunelm sits just over 6% rich to overall macro conditions which have been flatlining for months - model fair value has been between 1,100p and 1,200p for more than four months now.
That’s not big enough to trigger a bearish signal, but it is enough to say that these aren’t great levels to chase the stock higher.
Rather we need signs of a new macro trend one way or the other. For now, there’s no great opportunity. The stock (and UK retail) is stuck in a holding pattern.
Source: eyeQ. Past performance is not a guide to future performance.
Useful terminology:
Model value
Where our smart machine calculates that any stock market index, single stock or exchange-traded fund (ETF) should be priced (the fair value) given the overall macroeconomic environment.
Model (macro) relevance
How confident we are in the model value. The higher the number the better! Above 65% means the macro environment is critical, so any valuation signals carry strong weight. Below 65%, we deem that something other than macro is driving the price.
Fair Value Gap (FVG)
The difference between our model value (fair value) and where the price currently is. A positive Fair Value Gap means the security is above the model value, which we refer to as “rich”. A negative FVG means that it's cheap. The bigger the FVG, the bigger the dislocation and therefore a better entry level for trades.
Long Term model
This model looks at share prices over the last 12 months, captures the company’s relationship with growth, inflation, currency shifts, central bank policy etc and calculates our key results - model value, model relevance, Fair Value Gap.
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Disclosure
We use a combination of fundamental and technical analysis in forming our view as to the valuation and prospects of an investment. Where relevant we have set out those particular matters we think are important in the above article, but further detail can be found here.
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