Valuation of Pandora: Strategic valuation of Pandora from the DCF-model.

Student thesis: Master thesis (including HD thesis)

  • Lasse Witt Konge
4. term, Business Economics and Auditing, Master (Master Programme)
This paper contains a valuation of the Danish jewellery production company Pandora. The company has its headquarters in Denmark and own production facilities in Thailand. They own and sell through 2700 stores and besides that they sell to other dealers.

By looking at the company with help from a number of well-known models, the analysis creates a 360 degree view of the company, and its surroundings. This part is with focus on external trends, as well as internal factors, with the aim of finding the most critical value drivers.

The second part of the paper dives into the company and their economic performance. By analysing five years of annual reports, the economic review reveals a company with a quite negative development regarding economic performance. In the analysis it turns out, that all the economical KPI’s shows worst performance in the latest annual report from 2020.

The findings in the two analysis are summed up in a SWOT analysis, which shows the most crucial factors for Pandora within the next years. The SWOT divides these findings into groups of external factors that are not affect able and internal factors indicates that the company itself is in charge of the development. Some of the most crucial factors in this sum up, are the development in the COVID situation, which directly affect the price level of silver, which secondarily affects the ability to earn money for the company.

All earlier findings are then changed into concrete economical expectations, that turns out as a complete budget for Pandora until 2026. This budget is a key stone, in a calculation with the DCF model, that turns budgets into a concrete business value.
The valuation turns out a bit higher than the stock price, and thereby it is concluded, that the market valuation for the company is underestimated.
At last there is a scenario analysis, where some of the factors are changed in multiple ways, and the effect on the total valuation is set up to show what change in critical factors can mean to the calculated stock price.
LanguageDanish
Publication date31 May 2021
Number of pages95
ID: 413315557