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Danish jewellery brand Pandora has raised its sales forecast for 2015 after a very strong performance in the first quarter. Previously negative on the stock, Saxo Bank’s Peter Garnry is now neutral and here’s why.

Pandora’s first quarter revenue is up 37% and operating profits (EBITDA) are up 39% on strong growth in all regions, beating market expectations. Sales in Q1 totaled DKK 3.5 billion, and the company now expects sales for the full year to be more than DKK 15 billion - up from a previous forecast of more than DKK 14 billion.

Garnry says Pandora has proven to be a very strong company that is on track to overtake Tiffany & Co as the biggest jeweller in the world.

Garnry was negative on Pandora in December last year. He argued that the company's business model required it to constantly come up with new products right on trend, which if they missed could be a risk to sales. While the risk remains, Garnry now views the stock as neutral. He says that while Pandora offers some of the best returns on invested capital in Europe, the stock is also overvalued compared to other European equities.