Tiffany & Co. Analyst Roundup

Tiffany & Co. TIF reported Q3 EPS and revenue below estimates but the stock traded higher Tuesday, closing at $107.60, up 2.47 percent.

Barrington Research and Credit Suisse commented on the company after the earnings release.  Below are highlights along with current ratings and price targets.

Barrington - Market Perform, no price target

“We had expected management to bump up guidance if it beat expectations. Clearly, Street expectations got aggressive after management outperformed expectations the past couple quarters. Management reiterated its prior guidance that calls for EPS to be in the range of $4.20-4.30 and now expects worldwide sales to grow mid-to-high single digits, which is more conservative than its prior forecast of high-single-digits sales growth.

“The recent introduction of Tiffany T collection is off to a strong start and we expect continued strength to be exhibited in the fashion jewelry category, as well as strength for higher-end jewelry products for the upcoming holiday season.

“TIF shares are trading at 22x our FY/15 EPS estimate, slightly above a peer group of luxury companies at 21x. We wait for a better entry point as we believe upside to share price is limited at current levels.”

Credit Suisse - Neutral, $108 price target

“Strong demand from the Americas and better than expected gross margin expansion helped support Tiffany's 3Q bottom line (EPS $0.76 in line with our estimate and just shy of consensus $0.77), but we remain concerned given weakness out of APAC and a muted outlook for the remainder of the year.

“While we are encouraged by the progress made on transitioning TIF's low priced gold and silver business, increased AURs, and healthy demand out of the Americas, we are increasingly concerned that global macro challenges in APAC, Japan, and Europe near-term will hold back earnings power until FY15.

“The Americas region exceeded expectations in 3Q, with comps up 11 percent Y/Y constant currency, the strongest performance in the region in 3 years and well ahead of our model for 6.5 percent Y/Y.

“We are encouraged by comp momentum in the Americas (currently up an average of 9 percent in FY14) and believe the company's strategies to reposition low priced gold and silver product lines and enhance the in store selling experience combined with the launch of the new Tiffany T collection are resonating with consumers."