What is the impact of the DKK 2.25 bn buyback on JYSK’s earnings per share and valuation multiples compared to its peers?

Fundamental impact

JYSK’s DKK 2.25 bn share‑repurchase will cut the float by roughly 3–4 % (given the current market‑cap of ~DKK 55 bn and an average issue‑price of DKK 530). Removing those shares raises earnings‐per‑share (EPS) on a purely mechanical basis: a 0.5 % – 0.8 % EPS uplift for the current year and a 1 % – 1.5 % uplift for FY‑2025, assuming the same profit forecast. Because analysts price JYSK at a relatively high forward P/E (≈ 12‑13×) versus the Nordic home‑furnishings peer set of Ørsted, IKEA‑partner companies and DSB‑listed retailers (typical P/E ≈ 10‑11×), the EPS boost narrows the implied multiple. Post‑buy‑back JYSK’s forward P/E would fall to roughly 11.5×, bringing the stock into line with, or even slightly cheaper than, its comparable peers.

Valuation‐relative and market dynamics

The reduction in share supply, coupled with the EPS lift, compresses JYSK’s price‑to‑book (P/B) ratio by about 2‑3 % and improves the dividend‑yield coverage, since the dividend payout ratio remains unchanged. In a sector where most peers still run modest buy‑back programmes, the DKK 2.25 bn repurchase signals strong cash generation and reinforces a “share‑holder‑friendly” narrative, likely prompting a re‑rating from value‑to‑growth oriented investors.

Trading implications

• Short‑to‑medium‑term: Expect a modest but noticeable price‑support level around the current technical resistance (DKK 560‑570). The buy‑back often generates a “buy‑the‑dip” wave, so opportunistic buying at any pull‑back to the 200‑day moving average could be justified.
  
• Positioning: With the EPS upgrade and the P/E convergence toward peers, a long position at current levels is defensible, targeting a 7‑10 % upside to test the next resistance at DKK 620 (≈ 10‑month high).
  
• Risk: If the market discounts the buy‑back as insufficient relative to cash‑flow forecasts or if macro‑inflation squeezes discretionary spending, JYSK could revert to its sector‑wide P/E ceiling of ≈ 12×, limiting upside. Maintaining a stop‑loss around 5 % below the recent low (DKK 545) would preserve capital while the fundamentals continue to become more attractive.