Analysts are Dreaming of Tiffany & Co. (TIF) Diamonds

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By Jordan Faigen

Most of retail might be struggling, but luxury brands seem to be faring just fine.

Tiffany & Co. in the News

The high end jewelry retailer, Tiffany & Co. (NYSE:TIF), blew away Street expectations with better-than-expected first-quarter earnings. Tiffany reported $1 billion in first quarter revenue, beating the expected $953 million from the Street. The jeweler also reported that its worldwide net sales increased 15% and its same-store sales increased 11% for the quarter.

These positive numbers are actually a trend in the luxury retail industry. While regular retailers are still blaming the beginning of the year failures on the weather, luxury brands are meeting the needs of wealthier appetites. After revealing a 50% increase in earnings this quarter, Tiffany & Co. (NYSE:TIF)’s stock jumped 8% to an all-time high. And luxury brand Nordstrom, Inc. (NYSE:JWN)’s stock is also up 8% following their earnings report last week, while discount retailer The TJX Companies, Inc. (NYSE:TJX) is down 13% in 2014.

What Does This Mean For Tiffany’s Stock?

Citigroup analyst Oliver Chen reiterated his BUY Tiffany rating and $110 price target, noting that the company was “consistent with our thesis.” Chen was pleased with the company’s new products, as well as their new prices and sales leverage, noting, “”We’re pleased to see strong global sales growth, particularly in the Americas…and view a strong Americas comp and gross margin expansion (+205 basis points) as indications of better response to product despite price increases.” Chen has a +1.8% average return on the stock, helping him earn a +7.1% average return per recommendation and a 59% success rate recommending stocks.

Christian Buss of Credit Suisse, also reiterated his BUY rating and raised his price target to $96.  Buss pointed out that, “the jewelry category offers a compelling offset to challenging softlines [apparel, accessories] demand in the U.S.” And he argued that he sees, “Growth potential in emerging markets remains compelling [and] initiatives to reposition the company’s gold and silver business have potential to accelerate revenue growth and earnings power.” Buss has a +12.9% average return on the stock, helping him earn a +10.2% average return per recommendation and a 58% success rate of recommendations.

And while Canaccord Genuity analyst Laura Champine maintained her HOLD Tiffany rating, she raised her price target and full year sale estimates for the U.S. She expects, “Tiffany & Co. (NYSE:TIF) to benefit from improved product, particularly in the fashion jewelry business, under new design director Francesca Amfitheatrof.” Champine has a +0.9% average return per recommendation, helping her earn a +5.3% average return per recommendation and a 55% success rate of recommendations.


Not only is Tiffany & Co. (NYSE:TIF) thriving on the cash of wealthy buyers, but the company is also attracting mid-range customers with lower-priced silver pieces through its Atlas Collection. Analysts may not be happy with most of retail, but they are certainly willing to get in on the luxury action.

Jordan Faigen covers financial markets and the latest stock market news. She can be reached at [email protected]

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