Goldman Removes Tiffany & Co. From Conviction Buy List; Margin Expansion Not as Robust as Expected

On Monday, Goldman Sachs removed Tiffany & Co. TIF from the conviction buy list, but maintained a Buy rating. Gross margin expansion of +140 bps in the fourth quarter was “not as robust” as analyst Lindsay Mann had hoped. The analyst reduced “FY14/15 EPS to $4.21/$4.92 from $4.45/$5.03, reflecting roughly +150bps of gross margin improvement this year, ahead of management's +10-75 bps implied range.” Mann had hoped for “stepped up free-cash conversion near-term,” but a planned +$50 million increase in capex spending in 2014 “dampens” that possibility. The Goldman analyst also lowered the price target a dollar to $100 even. Shares of Tiffany have not moved in premarket trading and closed at $90.73 on Friday.