UPDATE: Monness Crespi Hardt Downgrades Tiffany & Co. to Neutral
In a report published Monday, Monness Crespi Hardt downgraded its rating on Tiffany & Co. (NYSE: TIF) from Buy to Neutral.
Monness Crespi Hardt noted, “At current levels the stock sells at 18.5x the January 2014 estimate of $3.50/share. The 2014 estimate assumes a 9% growth rate in earnings from the January 2012 estimate of $3.20/share. For a company of this high quality the firm believes that TIF shares are reasonably valued, which explains the move to a Neutral rating. Long term holders are advised to remain with the stock, but investors seeking a new position would likely find the shares at these same levels later in the year. The lower price points for TIF have had slow demand patterns and since these products carry a higher gross margin, margins have fallen over the past few quarters. The high end of the product line has held up to date, although competitors in the same environment have seen results suffer. Richemont, owner of Cartier, Montblanc and Van Cleef & Arpels, had flat quarterly demand (particularly in Asia) for the first time in four years. The company stated that retailers on Hong Kong and China have become more cautious about adding to inventory.”
Tiffany & Co. closed on Friday at $64.77.
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