Panmure Liberum has nudged up its price target for DFS Furniture PLC (LSE:DFS) to 310p from 300p, keeping a ‘buy’ rating on the stock. The broker points to an encouraging start to the first half of the company’s 2026 financial year, suggesting that a strong performance may already be in the bag.
DFS has been profitable and gaining market share, with management now expecting a notable lift in H1 profits. While current full-year forecasts remain broadly unchanged, Panmure Liberum has increased its forecast for profit before tax (PBT) by roughly 7%, reflecting strong trading momentum.
The broker highlighted DFS’s continued focus on innovation, data, and technology. These efforts are helping to enhance product development and marketing effectiveness, and are evidently paying off. It believes DFS is well-positioned to tap into underlying demand in the UK sofa market, while also accelerating growth in adjacent areas such as home furnishings. If the market rebounds more quickly than expected, DFS could see significant upside of 25-70% to 2028 PBT estimates.
A trading update for the first 19 weeks of FY26 shows order intake growing compared with last year, even against a strong prior-year benchmark. Growth is being driven by a combination of higher volumes and average order values. Gross margins are also benefiting from lower freight costs, smarter buying, and reduced interest costs from the company’s finance arm (IFC).
Looking ahead, Panmure Liberum expects DFS to deliver strong year-on-year profit growth in H1, while maintaining confidence in consensus expectations for the full year (£40.6m PBT). Forecasts for FY26 include 3.6% growth in gross sales, a small improvement in margins to around 57.1%, and modest cost savings. Longer-term projections assume 3% market growth, further market share gains, and gradual expansion in the Home category, supporting gross sales growth to £1.546bn by FY28.
With the stock trading at just 11.5 times expected earnings for December 2026, Panmure Liberum considers DFS’s valuation undemanding, leaving room for potential upgrades if performance continues.