Editor’s Note
Pandora’s shares declined following a Jefferies downgrade, as analysts highlight the dual headwinds of rising silver costs and pressured consumer spending.
Pandora’s stock price fell after analysts warned the company is facing dual pressures from soaring silver costs and increasingly cautious consumer spending.
Jefferies analysts downgraded the stock from “Buy” to “Hold” on Tuesday, stating that “increased consumer spending pressure” coupled with rising silver prices has put the business in a dilemma.
Shares of Pandora, the world’s largest jeweler, plunged nearly 7% after analysts warned of pressure on its performance due to volatile silver prices and downgraded the stock from “Buy” to “Hold.”
Jefferies analysts stated in a Tuesday research report: “The combination of increased consumer spending pressure and persistently high silver prices puts Pandora’s business in a difficult position.”
The report added: “Given the volatility in silver prices, the most challenging issue will be investors’ long-term reluctance to increase holdings in the stock. This means that even if silver prices fall back, the stock price may rebound due to mechanical earnings growth, but investor willingness to enter the market will be slow to recover.”
Pandora’s stock fell 6.7% in afternoon trading, ending a two-day winning streak. The stock fell 46% in 2025 and is down 26% year-to-date.
Over the past year, Pandora’s stock price has fallen sharply while silver prices have continued to rise.
In January, Pandora lowered its profit forecast and warned of weakening U.S. consumer confidence.
However, Jefferies pointed out that the real culprit is the price of silver.
Despite a recent sharp sell-off in silver, prices are still nearly double what they were a year ago. Jefferies’ model estimates this will lead to a 60% decline in the company’s profits in 2027.
Analysts lowered their target price for Pandora from 850 Danish kroner (approximately $84) to 530 Danish kroner.
They added: “We believe that switching to silver-plated or stainless steel materials is not a panacea. This would increase production complexity and could also lead to a decline in product quality, harming the customer experience.”
Rising raw material costs are squeezing Pandora’s profit margins on one side, while a deteriorating macroeconomic environment is impacting the company on the other. Pandora’s core customer base consists of low-income consumers, who are struggling with rising living costs in what is described as a “K-shaped economy.”
Jefferies stated that in response to rising raw material costs, Pandora raised product prices by about 14%, which has hurt consumers’ willingness to purchase.
In January, Citi analysts also downgraded Pandora to “Neutral,” citing slowing sales growth and extreme inflation in silver prices.
Pandora is scheduled to release its full-year financial results on Thursday.