Wells Fargo Analyst: 'No Fatal Flaw' At Tiffany & Co.

Tiffany & Co. TIF shares are down nearly 15 percent since reporting disappointing holiday sales, but an analyst said Tuesday the company's problems are temporary.

Wells Fargo's Paul Lejuez said sales were hurt by a higher dollar's affect on U.S. tourism as well as an ill-advised marketing focus by the company on its newly launched T line of jewelry products.

But Lejuez called the two issues "transitory" and said the selloff presents a buying opportunity.

The analyst upgraded Tiffany to Outperform, from Market Perform.

Tiffany traded recently at $89.58, up 1.4 percent.

The jewelry retailer last week said sales fell 1 percent to $1.02 billion during the two months ended December 31, while same-store sales were flat compared with a year earlier.

Tiffany said the stronger dollar will result in "significant headwinds" in 2015 that will hurt sales to tourists in the U.S. as well as currency translations from sales abroad.

Lejuez expects earnings will "rebound strongly" in 2016, although 2015 will be hurt by the stronger dollar.

Slowing economies in Europe, China and Japan have recently spurred the dollar to its highest level in more than a decade against the world's major currencies.

But Lejuez said marketing missteps were equally to blame for Tiffany's disappointing holiday.

The company's tight focus on its new T collection left shoppers "looking for something more traditional," with few reminders of other Tiffany merchandise, Lejuez said.

Lejuez also questioned price points for the T collection.

Yet the T collection did draw new customers, "demonstrating that there is no fatal flaw in the Tiffany brand," Lejuez said.