Fundamental Analysis and Valuation of Pandora A/S

Nadiya Cox

Student thesis: Diploma thesis


PANDORA is a company which designs, manufactures and markets hand-finished and contemporary jewellery made from high-quality materials at affordable prices. The company employs more than 27.300 people worldwide of whom around 13.200 are located in Thailand where production is carried out. The purpose of this thesis is a theoretical valuation of the shares of PANDORA for 31st December 2017. The valuation is based on a strategic analysis of the company, as well as an analysis of the historical financial results. The strategic analysis determines PANDORA’s non-financial value drivers using such strategy models as PESTEL, Porters Five Forces and Value Chain analysis. Following up with SWOT-matrix that seeks to sum up main issues from the analyses made. The strategic analysis shows that PANDORA’s revenue still is very dependent on one product category – charms. The management of PANDORA is aware of this risk and intend to develop other product categories in the future. Furthermore, with almost all production concentrated in Thailand, this makes the company vulnerable to the economic and political situation in the country. The study of financial drivers shows solid return on equity and more effective ratios for asset turnover. Based on financial and non-financial analysis, a budgeting has been completed. The budgeting covers a fiveyear period followed by a terminal period. The valuation is based on the Discounted Cash Flow model. The choice of this model is explained in its practical attractiveness by many investors. With a discount rate, WACC, at 4,88 pct. and growth in a terminal period at 2 pct. should PANDORA’s share costs 2.424 kr. The market price for this share on 31.12.17 was 675,50 kr., which means that the share is heavily underestimated. However, the valuation is associated with significant risks of uncertainty, because it depends largely on the determining of WACC, changes in budgeting variables etc.

EducationsGraduate Diploma in Accounting and Financial Management, (Diploma Programme) Final Thesis
Publication date2018
Number of pages93