Pandora (Sell, TP: DKK400.00) - May the charms be with you
We are in line with consensus ahead of the Q3 results (due at 07:30 CET on 3 November), and expect the negative impact from temporary store closures and FX to be offset by e-commerce growth. However, with Covid-19 cases on the rise again and Q4 highly dependent on store traffic, we believe earnings risk is increasing. In our view, this creates an unfavourable risk/reward, with the stock up c130% in the past six months and trading at record-high multiples. We have downgraded Pandora to SELL (HOLD) and reiterate our DKK400 target price.Pandora designs, manufactures and markets jewelry made from genuine metals. Co. designs, produces and sells charms, bracelets, rings, necklaces, pendants and earrings. Co.'s products are made from gold, silver, gemstones, cultured pearls and stones and other jewelry materials. Co.'s jewelry is sold in more than 90 countries on six continents through approximately 9,900 points of sale, including more than 1,400 concept stores. Co.'s products are sold globally through such points of sale as concept stores, silver stores, gold stores, shop-in-shops and white stores.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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