UPDATE: Citigroup Downgrades Tiffany & Co. on Valuation Call

In a report published Wednesday, Citigroup analyst Oliver Chen downgraded the rating on

from Buy to Neutral, but raised the price target from $84.00 to $88.00. In the report, Citigroup noted, “We're impressed by strong global comps in Asia, Europe, and Japan and gross margins were up +117bps bps which was best GM improvement since 4Q10. TIF's valuable brand equity is working given strength in higher price points statement and fine jewelry, and growing global awareness. TIF's stock +42% YTD and +29% since we launched on 9/13/2013, which has yielded a valuation of ~20x. We're stepping to the sidelines given our view of a fairer risk/reward as valuation is near 3-yr high of 22x. We believe the stock could be in wait & see mode as TIF works to reinvigorate growth in Americas. We do believe TIF deserves a multiple at the high end given improved visibility & raise our PT to $88 (from $84) based on 22x (from 21x).” Tiffany & Co. closed on Tuesday at $80.12.