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Analysts Maintain a Favorable Outlook on Tiffany

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Mar. 20 2018, Updated 6:33 a.m. ET

Most analysts maintain “buys”

Most analysts maintain a favorable outlook on Tiffany & Company (TIF) stock. Tiffany reported stronger-than-expected top and bottom line results in fiscal 4Q17 thanks to its continued strength in Mainland China, new store openings, and increased spending by local customers.

Moreover, the company’s sales are expected to grow in the coming quarters, reflecting its square-footage expansion, new product launches, focus on store remodels and the e-commerce channel, and investments in marketing.

Meanwhile, strength in the Asia-Pacific pacific region (primarily in China) is further expected to support its sales growth rate.

The anticipated growth in Tiffany’s top line is likely to drive the company’s bottom line. Moreover, a focus on productivity savings and low product input costs is expected to cushion its bottom line growth rate.

However, in the near term, the company’s planned investments in growth initiatives are likely to subdue its margins and, in turn, its EPS (earnings per share). Moreover, higher wholesale diamond sales could further pressure TIF’s margins in the coming quarters.

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Ratings and price targets

Of the 27 analysts providing recommendations on Tiffany stock, 56.0% have suggested “buys,” and 44.0% have maintained “hold” ratings on the stock. Meanwhile, analysts have suggested a price target of $111.98 per share on Tiffany stock, which represents an upside of 14.8% to its closing price of $97.51 on March 16, 2018.

In comparison, the majority of analysts maintain “hold” recommendations on Signet Jewelers (SIG) stock as near-term operational issues related to the company’s credit portfolio transition are likely to restrain its sales and earnings growth rate.

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