Wall Street Strategies Comments On Tiffany Update And Earnings Assessment Report

In a report published by Wall Street Strategies, Tiffany TIF soothed the nerves of its investors on a few fronts. Wall Street Strategies said that Tiffany capped off a strong FY10 with a solid 4Q10; constant currency comps strengthened compared to 3Q10 in all geographic regions and gross margin expanded in excess of 200 bps y/y (in line to consensus) as price increases counteracted initial signs of higher product costs. “New product introductions, including an updated assortment of the re-launched handbag line and the yellow diamond collection, were met with enthusiasm by Tiffany's global customer base which undoubtedly was feeling greater comfort in their financial standings after the gains notched by risk assets in 2010. We are upgrading our rating on the stock to Buy and lifting the price target to $68.00 from $62.00. The stock trades on a very reasonable (for a luxury goods purveyor) of 15.8x our FY12 estimate of $3.80 per share, south of the five-year mean on Tiffany, and unbecoming of a business that has clear sales and operating margin momentum brought about by embedded competitive advantages.” Tiffany closed yesterday at $59.40.