Pandora （PNDORA.US）Post 2Q24：Top~line strength continues， forward setup incrementally more difficult； Sell on valuation

Investment Rating - The report assigns a "Sell" rating for Pandora (PNDORA.CO) [2][6]. Core Insights - Pandora demonstrated solid organic top-line growth of +15% in 2Q24, exceeding the Visible Alpha Consensus Data estimate of +12% [2]. - The company upgraded its FY24 organic revenue guidance to a midpoint of +9-12%, up from +8-10% previously [2]. - Despite the positive near-term performance, the report highlights increasing challenges for the second half of 2024, including tougher comparables, commodity margin pressures, and heightened expectations for operating leverage [2][3]. - The report notes that Pandora's current valuation is at a premium compared to historical multiples, trading at 15x PE versus a 10-year average of 13x [2][8]. Summary by Sections Financial Performance - Revenue for FY24 is forecasted at Dkr31,393.4 million, with EPS estimates revised to Dkr64.45 for FY24 [4][8]. - The report anticipates total revenue growth of 11.6% for FY24, with EBIT margins projected at 25% [4][8]. Market Trends - Current LFL (like-for-like) trading is reported at +MSD, with expectations for moderation in growth, particularly in Germany [3]. - The US market remains a key focus, with space growth driving performance, while LFL growth has moderated to +5% in 2Q24 [3]. Commodity Impact - Recent moderation in spot silver prices has led to a reduction in cumulative spot commodity impacts to -140bps, down from -220bps [3][7]. - Pricing strategies are highlighted as the most significant offset to commodity pressures, alongside cost efficiencies [7]. Product Performance - New product categories, including LG Diamonds and the Essence collection, have shown strong performance, with the Essence collection contributing approximately 3% to total sales [7][8]. - Core charm collections, however, have underperformed, growing only +1% [7]. Valuation and Price Target - The 12-month price target is set at Dkr1,060, reflecting slight organic growth upgrades and reduced commodity headwinds [8]. - The report emphasizes that despite brand momentum, the current valuation appears to be largely priced in, warranting a "Sell" rating [8].