Discounted cash flow valuation of Pandora A/S.

Abstract

This thematic paper demonstrated how to value the stock price of PANDORA A/S which applied the concept of discounted cash flow to firm model, creating a forecast and calculating a reasonable valuation of the firm’s share price and at the end making a decision whether to buy/hold/sell the company’s stock. Pandora A/S is a Denmark-based company engaged in the design, manufacture, and marketing of jewelry. Its product offering is divided into five categories: charms and bracelets, earrings, rings, watches, and necklaces and pendants. The company had very impressive growth rate during the past 5 years. Moreover, the company had invested in the new factory at Lamphun which worth than 1.8 Billion DKK and started the commercial production in early 2017 which will increase the production capacity to reach 200 million units/year. The new investment is expected to support their expansion strategy and deliver better earnings for the company The result from this paper shows the value of PNDORA share price is expected to be valued at 16% higher than the current share price. Additional with the potential growth and their strong business model. This result leads to my recommendation of “Hold/Buy”.