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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
CONSUMER DISCRETIONARY SECTOR
- We previously noted a Danske Bank trade idea from November to buy Pandora 28's outright.
- Danske argued the bond traded at BBB- spreads despite Pandora's BBB profile, likely due to being relatively unknown in the market, recession fears and/or higher leverage since issuance. Danske believed that the information discount would likely narrow as investors become familiar with the company and the strength of its brand. They saw a good ability to adjust leverage via reduction in shareholder remuneration as well as strong margin/CF resilience.
- Yesterday's Q4 results exceeded market expectations, driven by strong holiday season sales, particularly during Black Friday and Christmas (see our analysis elsewhere of the broader Christmas retail sales data).
- Prelim. Q4 revenue reached DKK 10.8bn, surpassing the consensus DKK 10.58bn with 12% (15% in the US).
- Prelim. Q4 EBIT was DKK 3.7bn, slightly above consensus of DKK 3.66bn with a prelim. margin of 34% (from 32.5% at FY22), bringing the FY margin to 25% (in-line with guidance).
- Equity analysts from RBC highlighted Pandora's ongoing brand momentum while Citi analysts note that Pandora will likely be one of few companies showing Q4 QoQ sales growth acceleration. Danske see the results as a credit-positive update to their trade idea.
- Pandora equity is +5% YTD. The 2028 bond flirted with ASW spreads below 100 in December though have widened to 107bps since then. The ASW is at a similar level to end-Nov (108bp). We present the below chart showing the Pandora 28s ASW vs. EUR BBB Non-Financial Corporates.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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