Market Overview

Tiffany's Risks Are Better Discounted, Oppenheimer Says In Upgrade

Share:
Tiffany's Risks Are Better Discounted, Oppenheimer Says In Upgrade

The near-term risk-reward in Tiffany & Co. (NYSE: TIF) stock is now more favorable due to recent internal initiatives and quarterly earnings, according to Oppenheimer. 

The Analyst

Oppenheimer analyst Brian Nagel upgraded Tiffany & Co. from Perform to Outperform and increased the price target from $145 to $152.

The Thesis

Three factors help alleviate the investment risk in Tiffany, Nagel said in the upgrade note. (See his track record here.)

Due to a marked pullback, shares are trading at a more accommodative valuation, the analyst said. 

“Our new 12-18 month price target of $152 (up from $145) is predicated on a mid-20s multiple applied to our new FY20 (January 2021) EPS forecast of $6.10 (up from $5.62), a level consistent with the upper end of historical trading parameters for shares." 

New 2018 guidance accounts for possible impacts from a strengthened U.S. dollar, Nagel said. 

“The U.S. Dollar Index, while off recent peaks, still tracks at its highest level since July 2017, up 3 percent year-on-year. Sales to foreign tourists account for nearly 20 percent of domestic sales at TIF. We are optimistic our 3-5 percent comp forecast for Q3 and Q4 discounts adequately any currency-related headwinds,” the analyst said. 

Key internal initiatives are being enacted as demand dynamics are strengthening, he said. 

“Under Chief Artistic Officer Reed Krakoff, TIF is now more aggressively launching new products and marketing campaigns. The early reads of this initiative through Paper Flowers, Believe in Dreams and the Believe in Love campaign have been positive; the next major launch is expected [in] September with Tiffany True, a new engagement jewelry design." 

Price Action

Tiffany shares were up 1.5 percent at $125.23 at the time of publication Wednesday. 

Related Links:

Tiffany Shares Sparkle After Beat-and-Raise Quarter, $1B Buyback Announced

An Early Reaction To Tiffany's Q2 Beat-And-Raise

Latest Ratings for TIF

DateFirmActionFromTo
Sep 2020UBSMaintainsNeutral
Dec 2019Cowen & Co.DowngradesOutperformMarket Perform
Dec 2019Credit SuisseDowngradesOutperformNeutral

View More Analyst Ratings for TIF
View the Latest Analyst Ratings

 

Related Articles (TIF)

View Comments and Join the Discussion!

Posted-In: Brian Nagel internal initiatives Jewelry Stores Industry OppenheimerAnalyst Color Upgrades Price Target Analyst Ratings Best of Benzinga

Latest Ratings

StockFirmActionPT
INTCJP MorganMaintains70.0
STMCanaccord GenuityMaintains47.0
ELDeutsche BankMaintains248.0
UAADeutsche BankMaintains13.0
INTCDeutsche BankMaintains55.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com