Citi Touts Tiffany's Tailwinds, Upgrades To Buy

Tiffany & Co. TIF reported in November its third quarter earnings, which consisted of a top and bottom-line beat that played a part in a notable upgrade.

The Analyst

Citi's Paul Lejuez upgraded Tiffany's stock from Neutral to Buy with a price target boosted from $92 to $115.

The Thesis

Tiffany's third quarter earnings report made it clear the company boasts "positive inflection points," Lejuez said a note. Specifically, a new management team made it clear that it fully understands the challenges and opportunities ahead and they're "not sitting still."

Aside from company specific strategies, Tiffany stands to benefit from improving foreign exchange rates and a likely boost to its earnings per share from tax reform, the analyst said. These tailwinds aren't priced in to the stock at current levels, which makes the stock look "attractive."

The likelihood of Tiffany being acquired to become part of a European Luxury conglomerate is "increasing" and this factor also contributes to the now "much more favorable" risk to reward profile for owning the stock.

Price Action

Shares of Tiffany were  up about 3.4 percent at $99.41 and are up 27 percent since the start of 2017.

Related Links:

KeyBanc Models A Sparkling 20% Upside In Tiffany & Co.

Report: The Retailers Most Dependent On Holiday Sales