Market Overview

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

Tiffany's Risks Are Better Discounted, Oppenheimer Says In Upgrade
Related TIF
Bank Season Hits Roadblock As Morgan Stanley Earnings Appear To Disappoint
Apple Lowers Revenue Expectations As China's Market Slows

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

Jan 2019Wells FargoMaintainsMarket PerformMarket Perform
Nov 2018Morgan StanleyMaintainsEqual-WeightEqual-Weight
Nov 2018KeyBancMaintainsOverweightOverweight

View More Analyst Ratings for TIF
View the Latest Analyst Ratings

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


Related Articles (TIF)

View Comments and Join the Discussion!

Latest Ratings

EMNMorgan StanleyUpgrades90.0
DERMRaymond JamesUpgrades0.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Mid-Morning Market Update: Markets Mixed; Foamix Acne Drug Trial Meets Endpoints

Deutsche Bank Sees Knock-on Effect From Florence For Transportation Stocks