Jefferies-Pandora For 30 Pieces Of Silver-20251026

The almost relentless march upwards of silver prices reflects both an elevated demand for precious metal safety and the abundance of new,industrial uses for the metal (eg, AI data centres). Our view is that, until now,the business has been managed for gross margin stability at the expense of volume growth. We think that could be changing, and the resulting gross margin investment and higher volume growth would present a more attractive balance for investors.

A powerful headwind in recent years. At spot, silver represents an additional c.800bps of gross margin headwind in 2027 vs the CMD base in 2023, offset by c.17% of cumulative price increases to date worth c.330bps of margin. Yet the impact of this has yet to be seen in margin;gross margin has actually risen from 78.6% in 2023 to 79.1% in 2025. Even so, pricing is very visible in sales, with the current c.11% global price increases implying Q3 volumes will be down c.7%.