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Abstract(s)
The purpose of this dissertation was to value Pandora A/S, which is a publicly
traded firm on the NASDAQ OMX Copenhagen Stock Exchange in Denmark.
Pandora has been increasing its importance in the luxury goods market, more
directly in the jewellery segment, due to its remarkable growth and crescent brand
awareness.
Pandora’s enterprise value was estimated using three different methodologies:
discounted cash flows approach, multiples valuation and adjusted present value
methodology. The target prices obtained were: 785,76 DKK/share according to the
Discounted Cash Flows methodology, 690,77 DKK/share according to Multiples
valuation and 779,71 DKK/share if the Adjusted Present Value is used.
Since it is believed that the Discounted Cash Flows approach is the most
accurate of them, the final estimated target price is 785,76 DKK/share. This result
leads to the conclusion that Pandora is undervalued in the stock market, since its
actual trading price at May 29 2015 is of 683 DKK/share, representing a potential gain
to investors approximately of 103 DKK/share.
At last, a comparison between the target price obtained and one estimated by
J.P. Morgan was performed. J.P. Morgan presents a target price of 850 DKK/share,
higher than the one estimated on this dissertation due mainly to WACC and terminal
growth differences.